The risk factor for India as Pakistan goes from one crisis to another

India has been closely watching the developments in Pakistan. There are chances that Pakistan may resort to something irrational to divert attention from its domestic crisis

New Delhi, Jan 31: From a weak economy to inflation to energy supply to terrorism, Pakistan finds itself in a severe mess.

With no nation ready to come forward to bail Pakistan out, it is on the verge of a national bankruptcy. This is also to do with the fact that Prime Minister of Pakistan Shehbaz Sharif held out for many months against the tax rises and subsidy as demanded by the International Monetary Fund (IMF). The experts say that Sharif held out against these suggestions with the fear of a backlash during the elections which are due to be held in October.

Officials from the IMF are in Pakistan to discuss vital cash injection into Pakistan as the crisis only worsens by the day.

Another reason for the Pakistan Rupee to plunge into a new low was the fact that Pakistan had loosed controls on the Rupee to rein in the black market in US Dollars.

The situation is very similar to the one in Sri Lanka which had defaulted on its debt last year. This had in turn led to a severe shortage of food and fuel. There were widespread protests in the country which almost brought the island nation to a standstill.

The experts say that the situation in Pakistan could get much worse and this could lead to Islamabad ending up in defaulting on its debt.

The country is also reeling from the unprecedented floods that had ravaged Pakistan. The visit by the IMF officials is crucial for Pakistan as the country just has less than $3.7 billion in the State Bank. This according to reports is just enough for it to cover three weeks of imports.

Pakistan is in negotiation with the IMG for a loan package to help stabilise the economy. While the IMF visit would assess the economic situation in Pakistan, there is a major concern that without structural reforms and fiscal discipline, an IMF package may not be sufficient to bail Pakistan out of the mess that it finds itself in.

Some of the major reasons why Pakistan finds itself in this situation is due to a weak political leadership, the lack of bold reforms and too much debt. High inflation rates, weak foreign exchange reserves, lack of investment, trade deficit and too much dependancy on foreign aid are also some of the major reasons why Pakistan finds itself in such a situation.

The risk for India:

Officials OneIndia spoke with said that India too faces a risk due to the current situation in Pakistan. The leadership may indulge in some unpredictable actions in a bid to divert the domestic situation ahead of the elections.

Former Indian envoy to Pakistan, Ambassador T C A Raghavan told news agency PTI that there is a possibility of the Pakistan Army delaying the elections to give the civilian government to implement the reforms suggested by the IMF. A rational country would have thought about how best to get out of this crisis. Trading with India could be one option, as Pakistan is energy starved and could benefit by taking this option with New Delhi.

The other major worry for India is that terror could spiral out of control and in a bid to try and keep the situation in Pakistan under check, it may try and unleash terrorists into India. According to the Pakistan Institute of Conflict and Security Studies, Pakistan in 2022 witnessed a 28 per cent rise in terror strikes. 376 terror attacks were carried out by terrorists which claimed the lives of 533 people. 49 attacks were witnessed in December alone, according to the data which also said that 52 people including 36 security personnel were killed.