War Drums on the Subcontinent (again)
by Michael Krepon
Imran Khan has been effectively handcuffed. He inherited a hobbled economy, with fifty-four per cent of budget expenditure tied up in funding his military and paying off debt. As long as defense spending is sacrosanct, the “structural reforms” required to address social needs are beyond his ability to enact, as was true for his predecessors. China, Saudi Arabia, and to a lesser extent, the Gulf states, are providing much needed investment and offsets, which might help buy time before the need for yet another punishing IMF bailout.
Imran hoped, much like his predecessors, to improve ties with India. Every single economist worth listening to has advocated increased regional trade to boost Pakistan’s economy. A recent World Bank report, “A Glass Half Full: The Promise of Regional Trade in South Asia” estimates that with reasonable neighborly relations, trade could grow from two billion dollars to thirty-seven billion dollars.
Read the full article in Arms Control Wonk.