Pakistan, a nation once regarded as a strategic counterbalance in South Asia by global superpowers like the United States and China to check India’s rise, is now grappling with an unprecedented economic collapse that threatens its very existence. The country’s deepening crisis has sparked fears of potential disintegration as both internal and external pressures converge, creating a perfect storm that could tear the nation apart.
Pakistan’s current economic mess is largely of its own making, a result of decades of policy failures, corruption, and misguided strategies. The country’s decision to allow its soil to become a training ground for terrorists—aimed at destabilizing India and serving other geopolitical goals—has backfired.
Former U.S. Secretary of State Hillary Clinton famously remarked that Pakistan was “growing poisonous snakes in its backyard,” a warning that has come to haunt the country today. Years of mismanagement, reliance on foreign aid, and unchecked military spending have finally caught up with Pakistan.
The economic indicators are nothing short of catastrophic. Inflation has skyrocketed to over 30%, unemployment is rampant, and the national debt has reached unsustainable levels. The Pakistani rupee has plummeted against the US dollar, and foreign exchange reserves have dwindled to critically low levels, barely enough to cover a few weeks of imports. Pakistan is teetering on the brink of default, with no immediate relief in sight.
The World Bank’s decision to defer its bailout package, demanding guarantees that Pakistan is unlikely to provide, only adds to the woes. The International Monetary Fund (IMF) has echoed similar concerns, leaving Pakistan with dwindling options. Even China, which has invested billions in Pakistan under the China-Pakistan Economic Corridor (CPEC) project—a vital part of its Belt and Road Initiative (BRI)—is now wary. China’s ambitions of becoming a dominant economic power through expanded trade routes are at risk due to Pakistan’s instability, making Beijing hesitant to pour more money into a failing state.
Adding to the turmoil, Pakistan is facing internal unrest in its regions that could further threaten its territorial integrity. In Pakistan-Occupied Kashmir (PoK), an area that was once part of the princely state of Jammu and Kashmir before being taken by Pakistan, there are growing voices for integration with India. This sentiment has gained momentum since the BJP-led NDA government abrogated Articles 370 and 35A, which granted special status to Jammu and Kashmir, thereby fully integrating it with India. The Indian government, particularly under the current leadership, has been vocal about reclaiming PoK, a stance that has put Pakistan and even its ally China on the backfoot. For China, the instability in PoK directly threatens its multi-billion-dollar road project under CPEC, a critical trade route that passes through this disputed territory.
Simultaneously, Balochistan, Pakistan’s largest province, has been a long-standing hotbed of insurgency. The Baloch people have been victims of systematic repression, enforced disappearances, and extrajudicial killings by the Pakistani military, leading to widespread discontent and calls for independence. The Baloch insurgents have also made their desire known to break away from Pakistan and govern themselves, free from the brutal grip of Islamabad. This unrest is more than just a local issue; it’s a simmering rebellion that could ignite at any moment, adding another layer of complexity to Pakistan’s existential crisis.
India’s assertive stance on PoK and its strategic posturing have added to Pakistan’s challenges. Since coming to power in 2014, the BJP-led NDA government has made it clear that reclaiming PoK is on its agenda. This has not only unnerved Pakistan but has also forced China to reconsider its strategic investments in the region. The shift in India’s policy has created a new dynamic, where Pakistan, already stretched thin economically and militarily, now faces a powerful neighbor that is unwilling to tolerate any further transgressions.
Globally, Pakistan’s allies are also reconsidering their positions. The UAE, another long-time ally, has turned away from bailing out Pakistan, choosing instead to focus on its own economic recalibrations. The U.S., which once funneled billions into Pakistan to serve its geopolitical interests, particularly during the Cold War and the War on Terror, has pulled back, recognizing the futility of propping up a failing state that has consistently undermined regional stability.
The combination of economic collapse, internal unrest, and shifting global dynamics has brought Pakistan to the brink of disintegration. If the situation continues to deteriorate, the risk of Pakistan breaking apart is no longer a distant possibility but a looming reality. The disintegration could begin with Balochistan or PoK, but the ripple effects could spread to other regions like Sindh and Khyber Pakhtunkhwa, where ethnic tensions and demands for greater autonomy have been long-standing issues.
The collapse of Pakistan would have severe implications not only for South Asia but for global security as well. As a nuclear-armed state, the disintegration of Pakistan could lead to its nuclear arsenal falling into the hands of rogue elements or extremist groups—a scenario that would be catastrophic for regional and global peace.
Pakistan stands at a critical juncture. The current leadership must recognize the gravity of the situation and take decisive actions to prevent the country from descending into further chaos. This would require a comprehensive approach, including genuine economic and political reforms, curbing military excesses, and ensuring provincial rights and autonomy to address long-standing grievances.
Meanwhile, a shrewd Nawaz Sharif, now heading the coalition government in Pakistan, has sought to reestablish dialogue with India. However, this overture was firmly turned down by the Narendra Modi government, which declared that the time for dialogue had passed. This response is seen as a real slap in the face for Pakistan, which appears visibly desperate to mend ties with India. Yet, India remains unwilling, having learned from bitter past experiences. Under the previous NDA government, led by the moderate Atal Bihari Vajpayee, India extended a genuine hand of friendship to Pakistan. However, that goodwill was met with betrayal, as Pakistan responded by instigating the Kargil War, undermining trust and revealing its duplicity.
The current Prime Minister, Narendra Modi, also made efforts to improve relations with Pakistan when he first came to power with a massive mandate in 2014. His surprise visit to Islamabad in 2015, while returning from Afghanistan, was a bold diplomatic gesture aimed at fostering peace. However, this gesture was soon met with hostility as Pakistan-based terrorists carried out a deadly attack in Pulwama in 2019, killing over 40 Central Reserve Police Force (CRPF) personnel. Unlike the previous Congress-led governments, the Modi administration responded decisively. It conducted surgical strikes across the Line of Control and later carried out airstrikes deep into Pakistani territory to destroy terror camps, sending a strong message that cross-border terrorism would not be tolerated.
Despite such provocations and betrayals, some political parties within India, such as the Congress and its allies like the National Conference led by Farooq Abdullah, have questioned the government’s handling of Pakistan, reflecting domestic political divisions on how to deal with a hostile neighbor. However, the prevailing sentiment within India is that trust cannot be rebuilt with a nation that has repeatedly backstabbed its efforts for peace.
For the international community, particularly China, the UAE, and Western powers, the time has come to rethink their approach to Pakistan. Rather than merely offering conditional bailouts, they must push for meaningful reforms and foster dialogue within Pakistan to encourage a move away from its destructive policies. The aim should be to prevent a potential disaster that could engulf not just South Asia, but have broader implications for global security.
Pakistan’s future hangs in the balance. Its leadership must confront the stark reality that the old playbook of supporting terrorism, economic mismanagement, and relying on external aid is no longer sustainable. The actions it takes in the coming months will determine whether Pakistan can navigate this existential crisis or become a tragic case study of a nation undone by its own contradictions.
