The War in Afghanistan Drives the U.S. and Pakistan Apart
The United States and Pakistan are at a crossroads. The security partnership between the two countries — the most consequential foreign powers involved in the 16-year war in Afghanistan — took a turn for the worse this year. As the Taliban-led insurgency hammered away at the U.S.-backed Afghan military, President Donald Trump cautioned the Pakistani government to stop harboring the militants battling NATO forces in the longest-running U.S. war. The government in Islamabad, however, has too much at stake to heed Washington's warning. Projecting power into neighboring Afghanistan through the militant groups it supports is part of Pakistan's long-standing geopolitical strategy to try to maintain a sympathetic government in Kabul that will honor the border between their two states and resist India's advances. The politically powerful Pakistani military understands that the issue is a matter of national security. Consequently, Pakistan will continue its support for the Taliban, at the expense of its relationship with the United States.
Even so, the countries will maintain their defense cooperation — however begrudgingly — in 2018. Washington probably will avoid taking action that would further strain its relationship with Pakistan, since it can't afford to increase its security burden in Afghanistan when the situation on the Korean Peninsula demands so much of its attention. But even if it defers punitive measures such as revoking Pakistan's non-NATO major ally status in 2018, the U.S. administration will continue to ramp up pressure on the South Asian country. Washington, for example, could sanction members of the Pakistani government and increase the pace of drone strikes in the Federally Administered Tribal Areas in northwestern Pakistan in an effort to destroy militant havens in the restive region. Already, the Trump administration has announced that it would cut aid to Pakistan by over one-third next year.
Pakistan will respond in kind. As its relationship with Washington cools, Islamabad will enhance its diplomatic and security outreach to Russia and Iran. The two regional powers, after all, share Pakistan's interest in supporting the Taliban as a way to counter NATO's influence, and that of transnational jihadist groups such as the Islamic State, in Afghanistan. Yet these partnerships can go only so far. Islamabad's prominent, if largely symbolic, role in the Saudi-led Islamic Military Counter Terrorism Coalition will limit its ties to Tehran. Similarly, Moscow's relationship with India, its largest arms customer, will constrain the budding defense alliance between Russia and Pakistan.
Even without the mounting tension between the United States and Pakistan, though, conclusive peace talks in Afghanistan would be unlikely in 2018. The addition of 6,000 U.S. troops to the war-torn country, mostly in an advisory capacity, means that little will change on the battlefield. At most, the extra manpower will help achieve a more manageable stalemate between the Taliban and the Afghan military as the war drags on for a 17th year.
Pakistan: A Military With a Country
Pakistan's military, meanwhile, will have more on its agenda in 2018 than the conflict in Afghanistan. Beyond its dominant role in Pakistan's foreign policy, the military also plays a powerful part in domestic affairs. Its plan to nudge militants into the political mainstream through the formation of a new political party, the Milli Muslim League, will get a boost next year in the run-up to national elections. Hafiz Saeed — the accused mastermind of the 2008 Mumbai attacks recently freed from house arrest — has announced that the party will run in 2018 legislative elections. Saeed, who plans to include the issue of Kashmir's secession from India in his campaign, will serve as another point of contention in Pakistan's relationship with the United States and in its rivalry with India. In addition, his rise as a candidate will reflect the resurgence of the religious right in Pakistani politics. The movement will have an unusually strong presence in the 2018 elections thanks to the vulnerability of the ruling Pakistan Muslim League-Nawaz (PML-N).
As election season gets underway, the ruling party will face a leadership crisis. Ousted Prime Minister Nawaz Sharif, currently facing trial on corruption charges, may be sentenced to prison once the proceedings conclude, leaving competing factions of his party to vie to become the PML-N's candidate for prime minister. The power struggle and its probable outcome also stand to benefit the military. The likely victory of Sharif's brother, Shahbaz Sharif, in the succession battle would be a welcome development for the military, since he favors a more accommodating stance toward it than did his brother, its most vociferous critic. In the meantime, moreover, the strife in the PML-N will weaken Pakistan's most powerful party, giving the military even more clout in Pakistani politics. The boost will enable it to stand firm on its foreign policy, including Islamabad's continued support for the Taliban and enduring rivalry with India. Combined with the stronger Islamist component in Pakistan's politics, the emboldened military will further aggravate ties with Washington and New Delhi alike.
The India-China Rivalry Intensifies
Pakistan isn't the only foreign policy challenge concerning to India. The strategic rivalry between India and China threatened to give way to a military confrontation this year during a 73-day standoff over Bhutan's disputed Doklam plateau. Though both sides eventually stood down, the underlying problem will follow them into the next year. China's growing influence in South Asia — traditionally New Delhi's sphere of influence — has made India uneasy and has breathed new life into the border disputes between the two. The desire to counter China's growing assertiveness in the Indo-Pacific region will drive India to deepen its security partnership with the United States and Japan, which share the same ambition, in 2018. (Australia may join the effort, too, reviving the quadrilateral dialogue format.) At the same time, Indian Prime Minister Narendra Modi's administration will maintain its economic diplomacy with the members of the Association of Southeast Asian Nations to try to catch up with China on regional trade and investment.
Nevertheless, the competition for international influence between China and India will intensify in 2018. Both countries will move forward, albeit slowly, with infrastructure projects in Sri Lanka, including the Hambantota and Trincomalee ports, though domestic opposition could hamper the Sri Lankan government's efforts to help keep the ventures on track. Elsewhere in South Asia, however, Beijing seems to have the edge over New Delhi. Nepal, for instance, will continue courting Chinese investment through Beijing's Belt and Road Initiative, now that the Left Alliance has secured a majority in Nepalese parliament. Bangladesh, likewise, will prioritize getting more of the $24 billion worth of infrastructure projects that China has proposed there underway in 2018, regardless of who wins next year's national elections. In an effort to narrow the gap with Beijing, New Delhi also has offered Bangladesh a $4.5 billion line of credit for infrastructure development.
Back at home, the Indian prime minister and his ruling Bharatiya Janata Party (BJP) will carry on with implementing the Goods and Service Tax, a sweeping tax reform that passed in 2017. The ambitious measure will likely be Modi's last major reform in 2018 as his administration turns its attention to elections the following year. To shore up his chances of winning a second term in office, Modi will put off politically sensitive land and labor reforms that could challenge his image as a populist candidate. His administration will focus instead on a $32 billion bank recapitalization program to reinvigorate private investment, along with its efforts to bring the the new tax scheme into effect. Ahead of the national vote in 2019, state elections this year in Karnataka will offer an idea of how well Modi's administration is faring in the face of its failure to create manufacturing jobs on a mass scale. Transforming India into a global manufacturing hub was a pillar of Modi's platform, and his inability so far to deliver on the promise is his greatest shortcoming as his first term in office winds down.