Column

The first principles of investment wisdom suggest that if a company whose shares you have bought is now on the brink of bankruptcy, it should perhaps inhibit you from making yet more reckless investments in the same failing stock.

The head of China’s sovereign wealth fund acknowledged recently that he was “too scared to invest” in Western financial institutions after an earlier series of investments, made at peak valuations just before the global financial meltdown, bombed spectacularly. It is folly to throw good money after bad, as legions of investors with burnt fingers will tell you.

But international statecraft evidently works to an entirely different set of ‘investment’ rules. Which is probably why China’s leaders, for all their technocratic expertise and the luxury of being able to chart a strategic vision free of short-term electoral considerations, continue to play a decidedly losing hand in Pakistan.

China’s ‘investments’ in Pakistan over the years have been motivated by a two-pointed focus on using that country as a counterweight against India’s rise in South Asia and the world. To this end, China assisted Pakistan with its clandestine nuclear programme in the 1980s and 1990s with one of the most perverse and dangerous instances of nuclear proliferation the world has witnessed; as per recent revelations, it even carried out Pakistan’s first secret nuclear test in 1990.

On the international platform, China looks out for Pakistan, its ‘all-weather ally’, as it happened after theMumbai terrorist attacks; it interjects itself on Pakistan’s behalf whenever India responds with outrage to the export of terror from its northwestern neighbour.

Yet, after all these investments by China and other former patrons, Pakistan is today a socially fragile, economically busted basket case that is perilously close to falling off the map. Its most visible contribution to the world today is as the fount of armies of crazed jihadis whose sole USP is that — given their deep entrenchment in the Pakistani military and intelligence apparatus — they are close to getting their finger on a nuclear button.

A failing state with nuclear-minded jihadis on the prowl doesn’t exactly make for a glowing return on investment, but China’s leaders seem disinclined to cut their losses. If anything, they are stepping up with fresh ‘investments’: as part of a scenario-building exercise in the event of an Indian air strike on Pakistan following the November 26 attacks, Chinese military hawks have been pushing for China to “support Pakistan” and even exploit India’s preoccupation on its western frontier by launching military action along the Tibet border to “liberate” Arunachal Pradesh.

The trouble with spawning Frankensteins and patronising rogue states for short-term expedient interests is that sooner or later the monster, drunk on its own dizzying experience of ‘terror power’ and blind to the nuances of geopolitics, turns on the patron, who is then forced to go after it.

Contemporary history offers countless lessons of this. It was the US that groomed and armed the Taliban in Afghanistan to combat Soviet occupation in the 1980s; but after ignoring Pakistan-sponsored terrorism directed at India for years, it paid a heavy price on 9/11 and is today waging a war on the Taliban and al-Qaeda. Likewise, India provided sanctuary and arms to the LTTE but had to crack down after the Tiger changed its stripes.

China today is already beginning to feel the heat of lawless jihadis in Pakistan, who are targeting Chinese interests in Pakistan and in Xinjiang in northwestern China, where the Uighur ethnic minority is waging a separatist campaign.

It is inevitable that China will one day wake up to the folly of its failed investments in Pakistan. It’s a fair bet that China will then step in to clean up the mess in Pakistan that it actively abets today.