Pakistan Is Not Collapsing!

Pakistan is currently facing major economic and political crises. These are partly of its own making but mostly the result of external shocks in terms of commodity prices that have exacerbated the nation's balance of payments.  The Pakistani military's unnecessary meddling in politics and resulting political instability have not helped either. The unprecedented floods in the country have further added to the severity of the challenges.  

US and China Compete For Influence in Pakistan. Source: Wall Street Journal

Pakistan's multidimensional crisis has spurred many in India and elsewhere to predict the Pakistani state's imminent collapse. Some disgruntled Pakistanis have also jumped on the doomsayers' bandwagon. What is often ignored in such oft-repeated dire predictions is Pakistan's size and its geopolitical importance in the world. Indian analyst Amit Bhandari has summarized it well in a recent Hindustan Times Op-ed: "Despite the severity of the challenges, Pakistan is unlikely to collapse — largely because of its geostrategic importance. A bailout by the IMF or friendly countries will happen".  Let me expand on Bhandari's comments:

1. The collapse of a large country like Pakistan will be very destabilizing for the South Asia region and the world. Pakistan is the world's 5th most populous country. It has a large military armed with nuclear weapons.

2. Pakistan's location is geopolitically very important. It borders Afghanistan, China, India, Iran and the Indian Ocean.  It has a coastline next to the sea lanes that transport the bulk of the world's oil. It is connected to multiple strategically important regions of the world:  Central Asia, Middle East, South Asia and West Asia.  

3. China, the United States and Gulf Arabs have expressed a strong interest in maintaining Pakistan's stability. All of them are offering assistance to Pakistan.  China will continue to support Pakistan as it tries to stabilize its financial situation, state media quoted President Xi Jinping as saying, according to Reuters. Prince Mohammad Bin Salman of Saudi Arabia has offered to increase loans and investments of over $10 billion to Pakistan, according to Bloomberg.  American officials have said they support the IMF assistance to Pakistan, according to Dawn newspaper

4. Pakistan has received pledges of $10 billion worth of loans and grants to rebuild after devastating floods last year, according to Bloomberg News. The amount pledged exceeds the $8 billion that Pakistan sought at the United Nations Donors Conference in Geneva, Switzerland. 

Debt to GDP Ratios. India 91%, Pakistan 87%. Source: Visual Capitalist

Pakistanis are no strangers to forecasts of their country's collapse. There have been many such forecasts over the last 75 years, starting with its birth.  Western and Indian forecasts of Pakistan's collapse are not new.  Lord Mountbatten, the British Viceroy of India who oversaw the partition agreed with the assessment of Pakistan made by India's leaders when he described Pakistan as a "Nissen hut" or a "temporary tent" in a conversation with Jawarhar Lal Nehru.

Here's the exact quote from Mountbatten: "administratively it [wa]s the difference between putting up a permanent building, a nissen hut or a tent. As far as Pakistan is concerned we are putting up a tent. We can do no more." The Brits and the Hindu leadership of India both fully expected Pakistan to fold soon after partition.

1999 DoD Forecast: Pakistan Disappears by 2015

A 1999 US Defense Department study titled "Asia 2025" forecast Pakistan's collapse by 2015.  It further said that Pakistan would become part of a "South Asian Superstate" controlled by India as a "regional hegemon". Two of the study's contributors were "South Asia experts" of Indian origin. Much of the South Asia section of this study appears to be wishful thinking rather than serious analysis.  Resilient Pakistan has defied this and many other similar forecasts of its demise since its birth. 

Goldman Sachs Forecast Over Next 50 Years

Goldman Sachs analysts Kevin Daly and  Tadas Gedminas project Pakistan's economy to grow to become the world's sixth largest by 2075.  In a research paper titled "The Path to 2075", the authors forecast Pakistan's GDP to rise to $12.7 trillion with per capita income of $27,100.  India’s GDP in 2075 is projected at $52.5 trillion and per capita GDP at $31,300.  Bangladesh is projected to be a $6.3 trillion economy with per capita income of $31,000.  By 2075, China will be the top global economy, followed by India 2nd, US 3rd, Indonesia 4th, Nigeria 5th and Pakistan 6th. The forecast is based primarily on changes in the size of working age populations over the next 50 years.  

OpenAI's ChatGPT on Pakistan's Possible Collapse

There's no question that Pakistan is in the midst of very serious political and economic crises. The nation is deeply divided politically. The country's economic performance is dismal. It is of paramount importance for Pakistanis to come together to deal honestly with their internal political and economic differences. Doing so will help Pakistan's large young population realize their full potential to join the ranks of the world's top ten economies. 

Here's a Wall Street Journal video on US-China Competition in Pakistan:

https://youtu.be/wvw-85CC1t4

https://www.youtube.com/embed/wvw-85CC1t4"; title="YouTube video player" width="200"></iframe>" height="40" src="https://img1.blogblog.com/img/video_object.png" width="200" style="cursor: move; background-color: #b2b2b2;" /> 
 
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  • Riaz Haq

    T C A Raghavan, India’s former High Commissioner to Pakistan, on the cult of Imran Khan, the role of the Pakistan Army and strategic implications for India.

    https://indianexpress.com/article/india/crime/t-c-a-raghavan-pakist...


    T C A Raghavan, India’s former High Commissioner to Pakistan, on the cult of Imran Khan, the role of the Pakistan Army and strategic implications for India. The session was moderated by Strategic Affairs Editor Nirupama Subramanian

    On political engineering by the Pakistan Army versus the Pakistan Tehreek-e-Insaf chief Imran Khan

    There is a change from the past but former Prime Ministers Benazir Bhutto and Nawaz Sharif also had a very strong following at different points in time but were removed. While Imran Khan’s popularity appears to have a different quality of asserting greater civilian control over political affairs, it’s useful to recall that this is really an older script. What’s different is that unlike the past, when political figures chose to compromise themselves — they would go into exile or agree to a lower profile or simply follow what the military wanted to do — Khan has been defiant. Whether it is good or bad for Pakistan is a different question. He has certainly gotten under their (the military’s) skin and they have got under his.

    But this is the surprising feature about Pakistan. Every major political figure who has been built up by the Pakistan military has, at some point in time, turned against it and wanted to act independently. This is as strong an evidence as we will get to show that the civil-military tension or the civil-military dynamic is the real dynamic. There is a political constituency which is constantly seeking to enlarge its space and comes up on this collision course almost once a decade.

    On Khan’s future

    Khan had a personal charisma, being an iconic cricketer and helming social work, that had been flowering from 2010-2011 onwards. But that flowering had to do with the military’s effort to boost him up. So they put together different components of the party which he led and surrounded him with people who were always close to the military. Many of those now leaving Khan are those who never saw themselves taking on the military as part of the menu when they joined his party. The military is having difficulty dealing with his personal popularity and the kind of iconic status which he has built up as someone who’s trying to create a new kind of politics.

    Whether that is so in fact or not is a different matter but most of his followers see him as representing something new, a new political force and that element, while it will become subterranean because of the military pressure, will remain. That really will hold the key to Khan’s future.

    But then he also changes his position quite radically. Perhaps when he took on the military establishment, there was an element of wishful thinking on his part, or he had started believing his own propaganda. But now, at least for the short and medium term, his future looks much more difficult.

    On whether Khan will be disqualified

    Some people in the military establishment feel that they weighed the scales too much in favour of Khan and the playing field has to be levelled again. That can be done in a number of ways, through his disqualification or some grand kind of reconciliation in the future where those who had been disqualified earlier, such as Nawaz Sharif and others, are also allowed to come back into politics. That’s the broad direction as many in the Army feel that they can’t empower one party or one politician so much that they then become a problem, so there must always be countervailing political forces. That’s the way they can manage the system much better – by playing off one against the other. There is shallowness in Imran’s democratic credentials but he has expanded the political space. Now it’s a scrap between different forces trying to maximise their position.

  • Riaz Haq

    https://indianexpress.com/article/india/crime/t-c-a-raghavan-pakist...

    On weakening of Pakistan Army’s role

    Former Army General Qamar Bajwa, during his tenure, was built up as the soldier’s soldier and a far-sighted military statesman but by the time he left, virtually everyone had turned against him, and he was seen as a figure who had been trying to basically further his own interests. Whether this denting of the Army’s image means that there is going to be a structural retreat, in terms of the role the military plays in Pakistan politics, is more difficult to answer. I don’t think we will see an early retreat from the role it has played in the short-term. But there will be a long-term impact.

    On a scrap between the power elite and a divided judiciary

    Just like the political class and the military, the judiciary has also dramatically shown all divisions within it. These reflect, to a great extent, the larger polarisation in Pakistan itself. There are two Supreme Courts in Pakistan — one headed by the Chief Justice, who is inclined towards Imran Khan, and the other headed by the Chief Justice-to-be, who is inclined towards Nawaz Sharif’s party.

    Justice (Qazi Faez) Isa, who’s the second seniormost judge after the Chief Justice, will become the next Chief Justice. The Army realises that it has to choose from a menu of bad options and he is definitely preferable to some other judges. But while the current Chief Justice is in place, there is going to be a great deal of play and different kinds of conflicting judgments. The Supreme Court is split into two as are many of the High Courts. This means that the judiciary has emerged as a player in its own right in Pakistan’s politics over the past decade-and-a-half, since the first decade of this century when Justice Iftikhar Chaudhry was sacked. The bar associations have also emerged as a political force and they reflect, to some extent, the polarisation in Pakistan’s politics between different parties. They act as an independent force demanding their own space and are very sensitive to any infringement of their rights.

    Audience Questions
    On Pakistan’s ‘implosion’ and relations with India

    There’s no evidence that Pakistan’s state structures are collapsing or have stopped working or people are deserting their posts at the government machinery. There’s a very intense political conflict which prevents any kind of purposeful policy attention on the economy and other problems that Pakistan faces.

    This is something which the Pakistanis have to sort out themselves. I think external intervention will bring Pakistan together, so if you think that this is a time which presents a tactical opportunity for India, that would be wrong. The Pakistani military has a credible unified command structure, so it’s not as if we have suddenly got a better opportunity than in the past. So far, the domestic crisis has had no impact on India. It’s not had much of an impact on the ceasefire on the Line of Control (LoC) and it appears to be holding.

    There is a minimal relationship, we have no trade, there are not even High Commissioners in place, and you have very little political or other contacts.


    We have to be realistic about our own limitations. Even if India attempts to extend help to them, nobody begins from a clean slate. We cannot simply assume that it will be taken at face value. Dramatic gestures or dramatic changes will not lead to an improvement in relations. It will take a long time and there is no other instrument you have for embarking on that course, except patient, difficult diplomacy.

    On resumption of trade ties

    Given their economic crisis, Pakistan would be well advised to think of opening up trade with India and, in fact, General Bajwa did try this. But given the extent of political polarisation, it’s a very difficult thing to do just now. Nobody there wants to take a major decision like that on India and be accused by their political opponents of selling out.

  • Riaz Haq

    #Pakistan's #ImranKhanPTI expresses support for bailout deal in #IMF meeting at his home in #Lahore.
    IMF is seeking to build political support for the deal before coming general elections in the country scheduled for later this year.
    https://www.reuters.com/world/asia-pacific/pakistans-imran-khan-exp...

    KARACHI, Pakistan, July 7 (Reuters) - Pakistan's main opposition leader and former prime minister Imran Khan expressed support for a recently-reached bailout deal with the International Monetary Fund (IMF) after a meeting with officials of the lender on Friday, his party said.

    The IMF said it was, in the lead up to national elections in the autumn, seeking the support of Pakistan's political parties, including Khan's, for the new nine-month $3 billion stand-by arrangement and policies associated with the programme.



    Hammad Azhar, a former finance minister under Khan, who attended the meeting virtually, said in a post on Twitter that the former premier and his economic team had discussed last week's staff-level deal between the IMF and Pakistan's government.

    "In this context we support the overall objectives and key policies," Azhar said, adding the meeting at Khan's residence in the eastern city of Lahore was attended in person by IMF officials while Mission Chief Nathan Porter joined virtually.

    Earlier, the IMF's resident representative Esther Perez Ruiz said in a statement that the meetings with political parties were to "seek assurances of their support for the key objectives and policies under a new IMF-supported program ahead of the approaching national elections."

    The new deal, which will be vital to help stabilise Pakistan's struggling $350 billion economy, will be taken up for approval by the IMF board on July 12.

    The programme looks to replace a four-year Extended Financing Facility programme, originally signed by Khan's government in 2019, and which expired last month.

    Khan's government deviated from agreements under an earlier IMF programme days before he was ousted in a parliamentary vote last year, leading to a delay in the implementation of the programme and increased economic uncertainty.

    Pakistan's national elections are scheduled to be held by early November amid a charged political atmosphere that has seen Khan, the country's main opposition leader, in a bruising standoff with the government and the powerful military.

    'POLITICAL STABILITY KEY'
    The new programme will span three governments - the incumbent set up under Prime Minister Shehbaz Sharif, whose term ends in August, a caretaker administration that will conduct the polls, and then a new government following the elections.

    Azhar said the Pakistan Tehreek-e-Insaaf (PTI) party believed political stability was key for the economy and called for "free, fair and timely" elections after which a new government would initiate reforms and engage on a longer-term basis with multilateral institutions.

    Despite being the country's most popular leader according to polls, Khan faces the prospect of being disqualified from the elections if found guilty in any of the cases against him since his removal from power.

    The meeting is the highest profile engagement for Khan and his the PTI since he was ousted from power less than four years into his five-year term.

    He said the cases are a bid to sideline him and dismantle his party before the polls. The government and military deny this, and say the cases are on merit.

    The government launched a country-wide crackdown on the party in the aftermath of violent protests that followed Khan's brief arrest in May. The protests saw military installations ransacked. Khan was later released on bail.

    Many of Khan's key aides remain under arrest and many others, like Azhar, are in hiding. Azhar said some of PTI's economic team members attended the meeting virtually.