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Business News/ Opinion / Views/  Pakistan’s crisis poses a big threat to the region

Pakistan’s crisis poses a big threat to the region

Its political and economic free-fall raises the risk of instability not only within the country but also in its neighbourhood as non-state actors get emboldened and ratchet up activity

Police gates block a main road leading to the residence of Pakistan's former premier Imran Khan in Lahore, Pakistan, on Wednesday, May 17, 2023. Khan has said that police have surrounded his house in Lahore to possibly arrest him again, a week after an earlier arrest led to violent protests nationwide.  (BLOOMBERG)

Allegations of drug abuse and questions over the mental health of former Pakistan prime minister Imran Khan even as its ruling dispensation plans to transfer the cases against him to military courts and ban his Pakistan Tehreek-e-Insaf (PTI) party, are signs of an all-out attack to finish him politically. Khan has alleged that the establishment, backed by the all-powerful military, is doing so because it fears his popularity. The swell of people that protested earlier this month does seem to suggest he has wide support. Add to it, there has been no official word on elections in the large Punjab province despite being due. This lends weight to his claims of the ruling Pakistan Muslim League (PML)-N government under Prime Minister Shehbaz Sharif, possibly avoiding a political test. Indeed, while the country has had a record of internal strife, the open attacks on its military establishment suggest dissatisfaction levels have reached boiling point. Khan would have hoped for the protests to rage on. For some time, they did, taking authorities by surprise. But they now seem back in control. As the forces crack down with an iron hand, Khan has been isolated, with many top party leaders deserting him. While he isn’t giving up yet, his stand has evidently softened, urging talks, only to be rebuffed.

Meanwhile, the country seems in a free-fall, not just politically, but its economy too. Inflation has hit a record 35%, poverty is surging, its currency is plummeting, foreign exchange reserves are almost exhausted, and a debt default looms. That the government hasn’t been ready to bite the bullet on tax increases and subsidy cuts has made a $7 billion bailout plan from the International Monetary Fund (IMF) harder to secure. It is banking on up to $400 million in promised foreign donor funds for a recovery from the devastating floods last year and on China to roll over more than $2 billion of loans that fall due next month for an immediate rescue. Even then, Islamabad may only manage to kick the can down the road. Pakistan reportedly has about $25 billion of repayments falling due next financial year. With economic growth near-stalled, it will need multiple IMF-scale loan arrangements to save itself from being tagged a defaulter.

Unfortunately, its deepening internal troubles heighten risks in all of the region, especially with the rag-tag militant group Taliban ruling Afghanistan with medieval methods. As Pakistan digs itself deeper into a hole, its reliance on all-weather friend China to bail it out will only grow, given its fallen credibility and strained relations with the rest of the world. Beijing might oblige, too, so as to tighten its grip on the country and use it to encircle India. Given its aggressive ways, though, others in the region would be more uneasy. The immediate worry, however, is over terrorist forces operating from Pakistan’s soil getting emboldened, which would not just stoke trouble on the country’s borders, especially with India, but also raise the risk of Pakistan’s nuclear assets falling into the wrong hands. To calm the country, elections may be the best way forward. They are anyway due in October, but the government could delay them if it senses public sympathy for Khan. And October is still some time away. If conditions deteriorate, we might even see a military takeover much before. Given its poor democratic record, that eventuality can’t be ruled out.

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Updated: 30 May 2023, 12:18 AM IST
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