Amarjit Singh Dulat, the former Special Director of the Indian Intelligence Bureau (IB) and the former Secretary of Research and Analysis Wing (R&AW, the foreign intelligence agency of India), believes that Indian Prime Minister Narendra Modi will help neighbouring Pakistan overcome the ongoing economic crisis. Talking to the local media in New Delhi, the former spymaster recently said that Prime Minister Modi might offer help to Islamabad by the end of 2023.

The former Director of R&AW also believes that the Prime Minister of India may hold out the olive branch towards Pakistan, stating that it is imperative to keep talks open with “a little more public engagement”. He stressed: “Every time is the best time to talk to Pakistan. We need to keep our neighbours engaged. In this year, my hunch is the PM will bail out Pakistan. No inside information, but it is my hunch.”

According to Dulat, the friendly nations of China, Russia and Iran have become increasingly powerful in the arena of Global Geopolitics in recent times, and India should be careful about this. He is of the opinion that although India considers the US as a friend, the former should not ignore its immediate neighbour.

It may be noted that Pakistan has been suffering from an economic crisis for the past few months. The South Asian nation has already gone bankrupt due to huge debt. In January 2023, Mian Muhammad Shehbaz Sharif, the Prime Minister of Pakistan, reportedly said that it was a matter of shame that his country, a nuclear power, had to beg and seek financial help. He stressed that it was embarrassing for him to ask for more loans from friendly nations, adding that borrowing loans was not a permanent solution for the financial crisis of the cash-strapped country.

While the Foreign Currency Reserve of Pakistan’s Central Bank has touched a new low, the rate of inflation is constantly increasing. The value of USD 1 has become more than 275 Pakistani Rupees. In 2022, the country had suffered a devastating flood, affecting one in three Pakistani nationals. It has a great impact on the National Economy, too. Now, the main problem of Pakistan is debt. Meanwhile, skyrocketing prices of essential commodities have destabilised Pakistan, politically. The people of Pakistan are facing an acute food crisis, as the economic crisis is believed to have reached its peak after the International Monetary Fund (IMF) halted grants and loans to Islamabad.

The real danger is that there is no such thing as long-term in Pakistan’s financial system. The top political leadership in Islamabad has always concentrated on Present. As a result, there is neither long-term investment, nor real foreign investment in that country. In a sense, Pakistan has used the entire amount of foreign investment in its own geopolitical interests, and not for economic development. Consumption is the main driving force of an economy. Artificially raising the price of the national currency and keeping fuel prices low by providing huge subsidies are common strategies to boost the consumption. Kristalina Ivanova Georgieva-Kinova, the Managing Director of the IMF, recently drew attention to the trend of tax evasion by the wealthy in Pakistan. According to the IMF Chief, the trend of tax evasion by the politically, socially or financially well-connected people is a fine example of rent seeking in Pakistan. She has explained that if a financial system is collectively future-indifferent, then its present will be threatened at some point.

The lack of Democracy in Pakistan, and the tendency of the Pak Army to intervene in the country’s Political Affairs are well known issues. Hence, there is no political stability in the country. No one knows whether the current Government would survive at all, whether the next Government would be formed through Democratic Elections, or whether the policies of the current Government would be radically changed by the next Government. Such a situation is not at all favourable for (foreign) investment.

According to economists, a low trust economy remains financially backward. The political instability usually encourages radicalisation, giving way to terrorism. It is the lack of Democracy that has destroyed the Economy of Pakistan.

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Published by Koushik Das

Koushik Das (born on May 16, 1976 in Kolkata) is a career journalist. Based in the Indian capital of New Delhi, Koushik writes mainly about foreign policies and current geopolitical issues, and rarely about other topics. His own political ideas are highly influenced by Antonio Gramsci, Louis Althusser, Michel Foucault, Michael Oakeshott and others. English philosopher and political theorist Oakeshott (Dec 11, 1901-Dec 19, 1990) says that “in political activity, men sail a boundless and bottomless sea. There is neither harbour for shelter nor floor for anchorage, neither starting-place, nor appointed destination. But we have to keep afloat”. (Rationalism in Politics, 1962) As a student of Political Science, Koushik loves to share his views on issues, which have great impacts on his thought process (and also on India, South Asia and of course on the global community), with his readers through his website – Boundless Ocean of Politics. By doing so, he tries to keep himself afloat. You will find some of his articles in https://inserbia.info/today/ (https://inserbia.info/today/author/kou_das13_i/), as he has been trying to assess the global geopolitics since 2003. You can also mail him at kousdas@gmail.com View all posts by Koushik Das