POOR nations that fight long wars quickly become insolvent. Pakistan is on the verge. In his haste to obtain international support for his unconstitutional rule, Gen Musharraf pawned away Pakistan’s future for mere dimes.

After 10 years of fighting, Pakistan’s ability to finance its ways and means has evaporated. As the war continues, more money is needed but is not available.

Now is the time to change the paradigm and save ourselves from insolvency. Pakistan cannot afford to fight a war, which is a frightfully expensive and aimless exercise. Yet to end the war, other means based on peace-building have to be adopted.

The good news is that such a formula already exists for Khyber Pakhtunkhwa and Fata in the form of the Post-Crisis Need Assessment (PCNA) that is a multi-donor funded, Pakistan-led effort driven by the administrations of the two regions. More about that in a bit; first, let us dissect the financial difficulties facing the country.

The size of our national budget for 2011-12 is Rs2,767bn. This is 14.2 per cent higher than that of the previous year. As a result of the suspension of the $11.3bn IMF bailout programme, the government will be left with less than $526m (Rs46bn) in net external financing up to June 30, 2012. This sum is just 5.3 per cent of the budget deficit, which is Rs856bn.

The remainder of Rs810bn will have to be raised from the domestic market, for which the government is likely to borrow from commercial banks.

This will increase interest rates and force the State Bank to print more money, which in turn would cause explosive inflation such as that in South America in the 1990s. It was perhaps his refusal to pump more money into the economy that forced Shahid Kardar to resign from his position as governor of the State Bank.

The first signs of insolvency are evident. Many public-sector employees don’t receive their salaries on time.

If, on the other hand, we wish to continue fighting the war, we need to provide funds to the military and the security services.

The total security-related expenditures in 2011-12 will increase by 15 per cent to Rs835bn, against 2010’s Rs727bn. If the military’s pension liabilities are added to security expenditure, then military expenditures would constitute 28 per cent of the budget.

Debt servicing will consume another 38 per cent of the budget. That leaves little for human development. Whatever little resources the provinces have are now being shifted to security-related expenditures.

The military situation does not appear to be improving despite this investment. Swat’s militants have joined the Afghan fighters in Kunar and Nuristan to launch attacks on Dir and Bajaur. It seems that the war in this part of the Hindukush will flare up more in the days to come. The militants have repeatedly attacked Pakistani territory.

They don’t have an alternative either, since they can’t return to their homes without affecting reconciliation. Moving towards peace is the prerogative of the government.

The answer lies in quickly adopting a peace-building strategy that has already been provided in the PCNA plan prepared for Khyber Pakhtunkhwa and Fata. It is already under implementation but more needs to be added to it and some additional fine-tuning is required. In it, principles for peace-building are wisely laid out within the local cultural context. It says:

“Reconciliation is a necessary step to move out of the cycle of conflict:

for centuries tribes have confronted each other and central authority [and] signed expedient peace deals which collapsed as interests changed, sliding communities back into cycles of violence. Development based on growth cannot take root in this environment; hardship and suffering endure.” This is sound advice and needs to be adopted.

In my view, the place to start this process of reconciliation should be Swat. A successful peace effort there will defuse the threat of war building up. However, before a process of reconciliation can begin, the matter of resolving enmities due to personal vengeance should be resolved. This is the right time to start the process, which should not be delayed. Clearly, those who have been hurt and have suffered would like to operate within the context of Pakhtunwali related to revenge and vengeance.

Most of those who have suffered are in the Khyber Pakhtunkhwa government today, so they will have to take the lead in forgiveness.

The PCNA understood the paradox correctly when it noted that “There is a tendency to associate Pakhtun culture with revenge and not with forgiveness, yet there are key tenets in the culture and certainly within religion that greatly value clemency. It is inevitable that there will be divisive issues within communities after every violent period, but these can be overcome and the difficult discourse emphasising this healing process must start as soon as possible. Reconciliation and forgiveness are not just necessary: they are essential. They must not wait until ‘the end’ of the crisis — it will not come without these. Like elsewhere, it is incumbent upon leaders to stand up and guide their people.”

Peacemaking is therefore a call for leadership. One does not need to belabour the point of obtaining peace urgently in Khyber Pakhtunkhwa and Fata for the survival of Pakistan. Any delay will provide time for Al Qaeda to take over these factions. The recently surfaced video showing the execution of security personnel by the Taliban in Dir is an example that displays Al Qaeda’s role in the matter.

While the PCNA contains good advice, its one major weakness is that funding from this window is being used more for budgetary support than being invested in efforts to defuse conflict. This failing needs to be removed by the provincial leadership immediately.

The writer is chairman of the Regional Institute of Policy Research in Peshawar.

azizkhalid@gmail.com