As rightly pointed out Pakistan is in a flux. From floundering economy to political uncertainty the government is facing resounding hostility for poor administration and capability to handle the growing public crises.
On the economic front with the exports stagnant, inelastic revenue collection, widening fiscal deficit and astronomical external debt, Pakistan is at the brink of an economic collapse. According to reports of IPR and State Bank of Pakistan (SBP), Pakistan’s debt to GDP ratio currently stands at a shocking 107% of GDP. The Gross Public Debt has risen from 72% of GDP at $95 billion (2018) to 87% at $112.8 billion currently. Total external debts and liabilities have risen from 33% of GDP (2018) to 45% (2020). Adding to the trouble is China Pakistan Economic Corridor (CPEC) related investments that has put Pakistan virtually under a debt trap. The Institute of Policy Reforms (IPR), a think-tank run by a senior leader of Pakistan’s ruling party, the Pakistan Tehreek-e-Insaf (PTI) has in fact stated that “Pakistan has slipped into a debt trap due to the government’s failure to bring reforms and weak fiscal management, which has also raised national security concerns.” On the political front unexpected yet interesting developments are taking place. Imran Khan though backed by the army is facing a tough competition from the Pakistan democratic movement (PDM), the eleven-party opposition that has a common objective- to bring down the Imran Khan’s PTI government and ensure that the army did not interfere in politics. There is visible public criticism and anger over Imran Khan’s handling of the various crises; the recent massive protest by the government employees is a case in point. Weak economic growth and political uncertainty has created conditions that are ripe for instability. For embattled and beleaguered Pakistan the future is hazy especially with the FATF sword still hanging (as Pakistan remains in the grey list) and the suspended International Monetary Fund (IMF) loan of $6 billion (which is yet to be resumed due to Pakistan’s lack of economic reforms).
An unstable neighbor is a concern for India. The major concern is that under an increasing economic crisis and the CPEC related debt trap, Pakistan has increasingly become a pawn in Chinese policy. In future there will be further military dependencies. Hence collusive China-Pakistan threat, both asymmetric and conventional is likely to magnify. India consistently desires a stable and responsible Pakistan that prevents militant groups from operating within its territory and seeks economic and political cooperation with its neighbours.
https://tribune.com.pk/story/2261394/external-debt-and-liabilities-surge [1]
Links:
[1] https://tribune.com.pk/story/2261394/external-debt-and-liabilities-surge
[2] https://www.indiatoday.in/news-analysis/story/cpec-crisis-china-plays-hard-pakistan-in-debt-trap-1742696-2020-11-20
[3] https://www.thehindu.com/news/national/pakistan-has-increasingly-become-a-pawn-in-chinese-policy-air-chief/article33447389.ece
[4] https://www.hindustantimes.com/analysis/paks-imran-khan-gets-squeezed-by-shrinking-economy-and-proactive-opposition-101611143607130.html