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:
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