Exclusive: Pakistan Caught in U.S.-China Feud as Instability Grows, Defense Chief Says

In an exclusive interview, Pakistani Defense Minister Khawaja Muhammad Asif tells Newsweek Senior Foreign Policy Writer and Deputy Editor of Foreign Policy and National Security Tom O'Connor that Pakistan is beset by a growing threat of instability rooted in economic turmoil, at a time when the nation is also caught in the crosswinds of the escalating rivalry between China and the United States.

Asif was appointed as defense chief in the wake of the no-confidence measure that ousted former Prime Minister Imran Khan and brought to power Prime Minister Shahbaz Sharif. It's the second time Asif has held this position, the first having been under Sharif's brother, former Prime Minister Nawaz Sharif, in whose administration Asif also served as minister of power and water. He was later appointed to the position of foreign minister under then-Prime Minister Shahid Khaqan Abbasi.

A member of the ruling Pakistan Muslim League (Nawaz), Asif has criticized the disruptive role played by the ousted Khan, whom Newsweek interviewed last week, and his influential Pakistan Tehreek-e-Insaf (PTI) party in Pakistan's severely polarized political scene. And yet, like Khan, Asif diagnosed fundamental failings in the current economic outlook of his nation that he warned would lead to further chaos in both politics and security.

Asif argues that substantial improvement is need to ensure Pakistan's stability, and key to that improvement is maintaining the increasingly precarious geopolitical balancing act between Washington, Beijing and other powers with whom Islamabad seeks good ties. Such relations are particularly important as Pakistan attempts to not only promote trade, but also counter the daily threat of cross-border militant activity that threatens the future of the Islamic Republic.

The following transcript has been lightly edited for length and clarity.

Newsweek: We continue to hear concerns about Pakistan's stability, not just due to the economic situation right now, but also the political unrest and the activity of militant groups. What would you say right now are the greatest threats to Pakistan's stability?

Asif: I think I'll start with the economic instability. Economic instability is one with which we are grappling for quite some time now. And the rest of the instability, whether it is political instability, or civil unrest or terrorist activities elsewhere, that is something we can take care of. That that's not a problem. And most of the political instability is also an outcome of economic instability. So, this is something which is the outcome of perennial economic instability, which we are facing for last five, six years now.

So, in my opinion, unless [there is] economic stability, we will not recover from the situation. And if economic stability is not restored, this sort of situation will persist.

We've been in touch with many officials of your government, including the prime minister, as well as the former prime minister and his PTI party, and we hear these opposing narratives from both sides. Given the situation and the volatility in the political scene in Pakistan, what do you think is to be done about Mr. Khan and the PTI with his current charges and the unrest surrounding it?

Actually, this sort of polarization was integrated way back, about four or five years ago. Our political situation, or the social situation also, was not that polarized the way we are facing the polarization these days. It's an extremely polarized society, politically and otherwise.

So, we have to dilute the polarization by, perhaps sometime in the fall, we will hold elections, and that will help us in depolarizing the situation. That is something in which people have the opportunity to express their opinion, participate in the election. The campaign itself is something which will give a lot of vent to the opinions of people and their sentiments. That is one thing.

And secondly, these things date back to 2018, if you ask me, what happened with Mr. Khan. Mr. Khan was brought into power by orchestrated and managed elections in 2018, which, in the following years, was proven beyond any doubt, he was there because of their help, and their maneuvering over the last maybe eight, nine, ten years. This project was launched sometime within the last decade, early last decade.

The project failed miserably. The result was totally abysmal for this project. And that support he gathered around him was basically with the help of the establishment then, and the moment he fell from power, that support slowly started disappearing and evaporating. So, he cannot reconcile with the idea. I'm not denying that that he has support in public opinion. I'm not denying that. But having said that, the kind of support he got in 2018, I don't think sort of support exists today.

So, without the help of the establishment in the next election, I think he won't be able to achieve anything, and he can see that because he has been partnered with the establishment for almost four years. And before that, also, he was hand in glove with them. So, he knows how things operate in Pakistan. And how things can reverse; fortunes can face a reversal.

We hope to hold elections, free and fair elections, and we will ensure that the elections processes are transparent, and nothing happens, in which internally and on the international scene also, people will doubt the process. That is one thing that is, I think, the most potent recipe to dilute this polarization in our society.

And then what about the mobs that take to the streets during situations such as Mr. Khan's arrest on May 9? We saw arson attacks blamed on his party and clashes with security forces. Is this the sign of a new dark chapter in Pakistan's politics?

This is something which has been introduced into our politics by Imran Khan. Pakistani politics has seen many upheavals starting from the '50s and onward until the last decade. But people who were aggrieved, they never resorted to violence.

The biggest example is currently [first elected Pakistani Prime Minister] Zulfikar Ali Bhutto's hanging, which was a judicial murder. But the [Pakistan] People's Party never resorted to violence. And then Benazir Bhutto was martyred. Again, the People's Party never resorted to violence. Nawaz Sharif was removed thrice from power, but PML(N) never resorted to violence.

This man [Khan], he actually orchestrated what happened on May 9. The people were trained, they were given instructions and they had the agenda, a very clear-cut agenda in front of them. Because all over Punjab and KP [Khyber Pakhtunkhwa], no official building or banks or markets were touched.

It happens in the United States of America when there is rioting, people go on a rampage in market areas and other places, on banks, but nothing of the sort. Exclusively, exclusively, the military installations were attacked. The corps commander in Lahore, his house was attacked. Air Field Mianwali, which is an airbase, which is a very strategic thing for us, was attacked. The forts in KP, where frontier constabulary are facing Afghanistan, it was attacked. Then, GHQ, the General Headquarters.

So, all these installations, they are basically the symbols of our defense. And you know, we live in a geography where we have a hostile neighborhood just next door. So, for us, or for any other country, for even the U.S., the symbols of their defense capability, or symbols of their army and armed forces are always something which is sacrosanct. And he deliberately attacked because he has been always saying that I'm not ready to negotiate with any politician, I have to talk to the establishment.

So, he thinks that establishment, which was his ally, let's say a year back or so, he now thinks that establishment is the only foe he has. He doesn't recognize his political foes. He thinks we are just nobodies. So, the man is so arrogant. Politicians, they cannot afford arrogance for long. Ultimately, they have to, you know, fall on their face, if they are so arrogant. So, this is what is happening with him. He still thinks that establishment should talk to him.

I think what Pakistan needs is a broad-based, new social contract, and it has to be negotiated not between establishment and politicians, we have other components of a past power structure, like judiciary, like bureaucracy, like big business, and the problems which show, in the start of this program you mentioned, they can all be sorted out if there is a national consensus. First, we must identify, and everybody knows what the ailments are today with our country and with our economy or with our defense. And we have to sort them out. This is something which is a need of ours.

You mentioned the hostile geography of Pakistan, and I want to talk to you about Afghanistan. Pakistan is one of the many countries in the region that's sought to establish at least working relations with the Taliban. Is this Islamic Emirate living up to its commitments, not only in human rights, but also in promising that Afghanistan would not be a base for militant groups with transnational aims?

Well, we have this problem. I went to Kabul, met the leadership in Afghanistan and what you said I told them, that Afghanistan's soil is being used for cross-border terrorism in Pakistan. We told them this very frankly, and bluntly, and you have to do something because it's part of the Doha Agreement, that Afghan soil will not be used for any terror activities, be it Pakistan or Iran or Central Asian countries or anywhere else.

The rest of the world took a commitment from Afghan peace negotiators that this thing will be strictly observed and Afghanistan's land will not be used for terrorism, but we do have a problem. People do come from across the border from Afghanistan, and we have almost daily casualties and our soldiers are martyred. Our Frontier Constabulary personnel, they are martyred.

So, this is something which we are facing. It's very painful for us, Afghanistan being our neighbor and we have even today over 5 million Afghan refugees living on our soil and most of them are not recognized by UNHCR, or some are recognized and the rest, four million, they are just there, they are [considered] guests of Pakistan for the last four decades.

And recently when NATO forces retreated from Afghanistan and most of the people who worked with the NATO forces during [former Afghan President] Ashraf Ghani's regime, they are, if I'm not wrong, close to 200,000 families living in Pakistan waiting to be evacuated to United States or other Western countries. So, a burden on our economy burden...It's so overstretched, it has become impossible for us.

But today I read a news item that they [the Taliban] have declared that all the historical monuments or places in Afghanistan will be protected by the government, irrespective of whichever religion they belong to. Most of these monuments are from the Buddhist era, when Afghanistan was being ruled by Buddhist rulers. And you remember the big Buddha statues were demolished during that last Afghan Taliban stint in power.

But this is one step they have taken today, and I felt a bit happy about it, that they are realizing that they have to become a part of the international community, and they have to abide by laws or rules or regulations, which are basically accepted by the international community.

As Pakistan faces these security concerns, the Sharif administration, like many other Pakistani governments, has sought a closer relationship with the United States, including in security. At the same time, Pakistan has also invested heavily in partnerships with regional countries such as China and multilateral institutions like the Shanghai Cooperation Organization. How is Pakistan balancing its immediate need in the region for security with these geopolitical forces that exist, such as the U.S.-China rivalry playing out across Asia and other parts of the world?

Foreign Secretary [Antony] Blinken is visiting China, let's hope and pray that things improve between China and United States.

But coming back to your question, it has been very difficult for us over the last many decades to maintain this balancing act between our relationship with the United States of America and with the regional powers like China, our friends in the Arabian Gulf, Iran, and, of course, the Russian Federation also.

But having said that, we value our partnership with the United States, a historical partnership, though we have complaints, what happened in the first Afghan war. We were abandoned then, we were left high and dry. And the United States just went back and then again, just about three years back when the Taliban came to power in Afghanistan, again this situation [in which] we are taking the brunt, again, for what was there in Afghanistan.

We wish them well. We want them to join the community of nations and become a responsible part of the international community. But having said that, we have problems, and Pakistan has to deal with these problems on its own.

Over the years, from the early '60s, we have cultivated relationships with China. It's almost six decades now. And we provided a corridor to the United States of America also. [Then-U.S. Secretary of State] Henry Kissinger went to Beijing through Pakistan. That was something which provided some sort of window for the United States with China.

But, as you said, the international geopolitical situation sometimes becomes very difficult for us to balance between different interest groups, or different groups which are jockeying for power and international influence. And Pakistan being a vulnerable country, both economically and strategically, it becomes difficult for us.

I think I'll come back to my answer to your original question: once we have economic stability in our country, I think we will really be in a better position to handle this situation. Our vulnerability, economic vulnerability, actually exposes us to so many problems, which sometimes we are unable to tackle.

Speaking of the regional situation, security concerns and geopolitics, we see that India, for its part, continues to expand its relations with the United States. We know the Sharif administration has sought some sort of inroads to India, but we've not seen at least publicly any serious stabilization of this relationship. How volatile do you feel the situation is in Kashmir is itself, along the Line of Control and between the two capitals, Islamabad and New Delhi?

With Mr. [Prime Minister Narendra] Modi coming to power in India, it's almost I think 10 years or something like that, the Indian outlook towards regional politics completely changed, because it is a Hindu nationalist government. The secular ideology, which India pursued since 1947, since the subcontinent was divided and we became independent, that was abandoned because of Mr. Modi's politics.

If you look at his politics in Gujarat, it was again based on anti-minority, it is based on communal tensions and of voting Hindu nationalist support by fanning sentiments against the community, and minorities, both Muslims, Christians, Buddhists, and so many other communities that are very large.

That has actually aggravated the situation between the two countries, with India taking a very nationalistic stand within the country, and obviously, India is a very big market, over 1.3 billion people. Everywhere in the world, the other big economies will need to have them as partners. But Pakistan is not a very big economy, and [is] a vulnerable economy. All we have is a geographical location, which is strategic, which attracts, I would say, not all the good things, it sometimes attracts some things which really make us even more vulnerable.

So, I think we do not have any problem with the United States developing a partnership with India if it is not at the cost of Pakistan. That is one. And balancing between the relationship with United States and our regional partners, again, it is not like that. We have common borders with China, we have common borders with Afghanistan, Iran, India.

We would like to have good relationships with them. We would like to improve our relationships with them if the relationship is not good. We want to live in peace. If there is no peace there, we will never be able to restore our economy the way we want to restore it.

So, I personally feel that some appreciation is required in Washington about our situation, and we should not be pushed into a situation where we have to make some very hard choices. Our relationship with America for us is very valuable. It has its history. It has some disappointments, some huge disappointments, but still we value our relationship with the United States and we want that relationship to flourish. We are big trade partners, we have a very large Pakistani diaspora in the United States and Pakistani interests over there. So, their business interests are also, considering our size, they are quite attractive and large.

So, this is something which we have to balance and, under the circumstances, under economic pressures, we are finding it difficult, but we survive. Inshallah.

Inshallah. You've described Pakistan as a vulnerable country, in terms of its economics, which in turn feeds the stability concerns. For readers from around the world, should they be concerned about and invested in the long-term stability of Pakistan as a nuclear armed nation and one of the most populous nations on Earth in this hostile geography that you're living in?

Our nuclear capability, or nuclear assets, they are not for any jingoistic or hostile intentions. If you observe, since we attained nuclear capability, the skirmishes, the wars, the battles between India and Pakistan have not escalated the way they escalated way back in 1965, and 1948, and then 1971. These were large-scale wars between India and Pakistan. We have had some sort of tension between India and Pakistan, but they are short-lived tensions, military tensions or border tensions.

So, I think it's something which underwrites our security, it's not for any hostile—no, absolutely no, absolutely not. India had become a nuclear power. And we were compelled not to be gobbled by India over the years or over the decades. This is something which underwrites the peace in our region and to a great extent, our security. Otherwise, we have absolutely no intentions. Absolutely no.

It is a program which is certified by the IAEA [International Atomic Energy Agency] and even as recently as a month back, there was a statement from the IAEA that all the standards—even from the United States—that our program is safe. So, this is something which the regional countries, our neighbors or even elsewhere, despite the fact that we have terrorist activities, which was a byproduct of a foreign war in the '80s and after 9/11, that's the byproduct of that war that threatened our internal security in so many ways, but we contained everything with conventional forces and conventional weapons.

And we will not, never, never, ever cross that threshold. That is something that just guarantees our independence.

Given these economic, political and security concerns, how do you in your role as defense minister of the current government led by Shahbaz Sharif plan to address these issues where other governments have been unable to in the past, especially at a time right now of perhaps historic level of concern regarding the stability of the country?

I made a speech in the parliament the day before yesterday. We have to address our finances first. That will provide us major comfort, the financial comfort will give us a lot of room. I personally feel that it has to come from within and not from without.

We have the potential of a much bigger revenue, which we are collecting, as compared to what we collect today. And then there's a huge burden on our economy. We carry some SOEs, some state-owned enterprises, from the days when everything was nationalized in Pakistan, way back in the '70s. There's a huge drain.

So, I personally feel that if we plug these things, that we increase our revenues, and I actually addressed in my speech the issues of some of the sectors [that] are not being taxed to the extent or to the capability they have, for the potential they have. They are paying taxes much less than the potential they have. So, we have to set our revenue system in a manner which brings us enough revenue stream, which will take care of our expenditure, the government expenditure, and give some breathing space to our middle class and lower income classes.

Otherwise, if this continues, our revenue is wasted, or revenue is not collected properly, and rich classes or upper classes, they just get away without paying anything or paying very little as compared to the capacity they have, what they should be paying. That's a very big problem in Pakistan.

And the size of the government must reduce. The size of the government is too large. We have departments which are there in the provinces also, and they are replicated or they are duplicated the federation also. So, these are economic reforms if they are undertaken. And this is not something transactional, these things cannot be done by budgetary steps, or budgetary initiatives, these are something [for] which there has to be some sort of an economic understanding or some sort of understanding between the people who run Pakistan, our big business, politicians, the traders, they must for the sake of this country, pay proper revenue.

And then we have a huge problem. We're running into thousands of billions losses in our petroleum sector and our power sector...So I think that the solutions, they are written. All we have to do is to pursue them and have the will to pursue them. The will, I feel in some ways, is lacking. Let's hope when we cross the election, October or November, we will have ample time to revamp our economy and improve our government income.

Because it's key for Pakistan stability?

Yes, absolutely. I think if I'm not economically stable, I will always be vulnerable, vulnerable to anything, vulnerable to almost everything. So, economic stability is something which is absolutely essential. People who are supposed to pay tax, they must pay tax. This this elite capture must be dismantled. That is what I feel.