'World will tremble if Pakistan falls
by Martin Sieff
Washington (UPI)
Washington (UPI)
Oct 21, 2008
The global financial crisis is close to knocking out its most important and potentially most dangerous victim yet: Pakistan needs a financial support package of $10 billion to $15 billion to avoid collapse.
The stakes could not be higher: With a rapidly increasing population of more than 150 million -- larger than that of Russia -- Pakistan is also the world's only Muslim nuclear power. But since the fall of President Pervez Musharraf earlier this year, the bitter regional, social and religious disputes that have been building for decades have exploded in public. The current government of pro-American President Asif Ali Zardari is struggling to maintain any effective presence at all in the vast North-West Frontier Province, which covers one-quarter of the country.
If the government in Islamabad goes bankrupt, then the extreme Islamist forces spearheaded by the Taliban of Afghanistan, who already enjoy broad support among the Pashtun tribes of the NWFP, will have a far greater chance to turn the great cities of Pakistan, especially giant Karachi, into chaos.
As American military analyst and UPI columnist William S. Lind has warned, Fourth Generation war -- 4GW -- non-state forces like al-Qaida benefit from undermining the structures of established states and can metastasize rapidly if a state structure collapses, especially in a vast nation like Pakistan.
The Taliban and their fellow Islamists, aided by al-Qaida, already have stepped up their guerrilla operations against the Pakistani army and police.
On top of all this, Pakistan is now on the verge of default. It needs $3 billion within a month to maintain its debt service schedule and $10 billion over two years. This seems peanuts compared with figures thrown around in the United States recently. The U.S. Congress approved a $700 billion bailout, and critics charged that even this huge sum would prove to be insufficient to restore investor confidence.
Precisely because major governments around the world feel under pressure, however, Pakistan is currently struggling to get a financial support package put together. Pakistani officials are meeting International Monetary Fund representatives in Dubai Tuesday to craft a rescue -- they hope.
But there have been some ominous signs: Apparently traditional supporters of Pakistan -- China and Saudi Arabia -- have shown no willingness to step up to the plate. Ironically, they are two of the handful of nations that do, in fact, have enormous financial reserves. But the plunging global oil price has spooked the Saudis, and the Chinese know their economic stability is dependent on the U.S. economy staying afloat and continuing to provide them with their most important export market.
Overall the Pakistani economy is in a desperate state, and the causes are long term, structural and not at all conducive to any "quick fix": The new Zardari government in Islamabad has inherited high inflation, large income inequality and a chronic lack of spending for infrastructure and education.
The caution and preoccupations of other countries around the world, however, do not diminish the threat to global and regional peace if Pakistan should default. The Zardari government -- already unpopular with the Islamists, the urban poor and its own military establishment, especially the officers of the Inter-Service Intelligence agency -- could hardly survive such a catastrophe. And if the Zardari government fell, the impact on regional stability would be dire.'
The stakes could not be higher: With a rapidly increasing population of more than 150 million -- larger than that of Russia -- Pakistan is also the world's only Muslim nuclear power. But since the fall of President Pervez Musharraf earlier this year, the bitter regional, social and religious disputes that have been building for decades have exploded in public. The current government of pro-American President Asif Ali Zardari is struggling to maintain any effective presence at all in the vast North-West Frontier Province, which covers one-quarter of the country.
If the government in Islamabad goes bankrupt, then the extreme Islamist forces spearheaded by the Taliban of Afghanistan, who already enjoy broad support among the Pashtun tribes of the NWFP, will have a far greater chance to turn the great cities of Pakistan, especially giant Karachi, into chaos.
As American military analyst and UPI columnist William S. Lind has warned, Fourth Generation war -- 4GW -- non-state forces like al-Qaida benefit from undermining the structures of established states and can metastasize rapidly if a state structure collapses, especially in a vast nation like Pakistan.
The Taliban and their fellow Islamists, aided by al-Qaida, already have stepped up their guerrilla operations against the Pakistani army and police.
On top of all this, Pakistan is now on the verge of default. It needs $3 billion within a month to maintain its debt service schedule and $10 billion over two years. This seems peanuts compared with figures thrown around in the United States recently. The U.S. Congress approved a $700 billion bailout, and critics charged that even this huge sum would prove to be insufficient to restore investor confidence.
Precisely because major governments around the world feel under pressure, however, Pakistan is currently struggling to get a financial support package put together. Pakistani officials are meeting International Monetary Fund representatives in Dubai Tuesday to craft a rescue -- they hope.
But there have been some ominous signs: Apparently traditional supporters of Pakistan -- China and Saudi Arabia -- have shown no willingness to step up to the plate. Ironically, they are two of the handful of nations that do, in fact, have enormous financial reserves. But the plunging global oil price has spooked the Saudis, and the Chinese know their economic stability is dependent on the U.S. economy staying afloat and continuing to provide them with their most important export market.
Overall the Pakistani economy is in a desperate state, and the causes are long term, structural and not at all conducive to any "quick fix": The new Zardari government in Islamabad has inherited high inflation, large income inequality and a chronic lack of spending for infrastructure and education.
The caution and preoccupations of other countries around the world, however, do not diminish the threat to global and regional peace if Pakistan should default. The Zardari government -- already unpopular with the Islamists, the urban poor and its own military establishment, especially the officers of the Inter-Service Intelligence agency -- could hardly survive such a catastrophe. And if the Zardari government fell, the impact on regional stability would be dire.'
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