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A Failed Economy Saved by Geography
Despite experiencing multiple political and economic crises in recent times, Pakistan’s economy has so far avoided a collapse similar to Sri Lanka’s. It is argued that the key to understanding its economic survival has been the effective utilisation of its unique geography, thereby exhibiting features of a rentier state. Its strategic location has enabled Pakistan to secure military and economic support from three major countries, namely the United States, China, and Saudi Arabia. While this enabled a razor’s edge type unstable economic survival, it also prevented the country from undertaking significant political and economic reforms.
Views are personal.
Pakistan with its chequered history has evoked extreme branding. At different points of time, it has been described as an elitist state, a rogue state, a rentier state, and sometimes even a failed state. Pakistan’s politics and economy have been in a state of almost constant crisis since the beginning of the new millennium.
Political developments in Pakistan since 2000 illustrate the extent of this crisis.1 Pakistan’s entry into the new millennium was marked by Nawaz Sharif being sentenced to life imprisonment and later, General Musharraf’s September 2001 decision to back the United States in its war against terror. Subsequent developments were marked by bloodshed and instability. Benazir Bhutto was assassinated in December 2007 after her return to Pakistan from eight years in exile. In November 2008, while the world was grappling with the fallout of the global financial crisis, terrorists trained in Pakistan launched an attack on Mumbai, an incident that demonstrated to the world the extent of Pakistan’s hand in state-sponsored terrorism. In May 2011, Osama bin Laden was killed by United States Special Forces in Abbottabad. The year 2017 witnessed the resignation of Prime Minister Nawaz Sharif, and later, his disqualification by the Pakistani Supreme Court from holding any public office. Imran Khan became the Prime Minister in 2018, but could not complete his term. In April 2022, he became the first Prime Minister to be removed from office through a no-confidence motion. As Pakistan prepares for elections in 2023, it faces “a fragile economy along with deepening domestic polarisation.”2
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