Pakistan Is Drowning in Debt

Rising prices, food insecurity, and a growing debt burden make
Islamabad’s other challenges all the more pressing.

 

ODonnell-Lynne-foreign-policy-columnist
ODonnell-Lynne-foreign-policy-columnist
Lynne O’Donnell
By , a columnist at Foreign Policy and an Australian journalist and author.
Opposition supporters march during a protest against inflation, political destabilization, and fuel price hikes in Rawalpindi, Pakistan, on July 2.
Opposition supporters march during a protest against inflation, political destabilization, and fuel price hikes in Rawalpindi, Pakistan, on July 2.
Opposition supporters march during a protest against inflation, political destabilization, and fuel price hikes in Rawalpindi, Pakistan, on July 2. FAROOQ NAEEM/AFP VIA GETTY IMAGES

Pakistan is in a political and economic death spiral that could push it over the same cliff as Sri Lanka, as internal conflict, regional instability, and global uncertainty all threaten the survival of the state.

Pakistan has struggled to recover from the pandemic and is now grappling with another spike in COVID-19 cases. But the country faces life-threatening challenges similar to what Sri Lanka faced before the island government collapsed amid 50 percent inflation; food, fuel, and medicine shortages; power cuts; and, in May, its first failure to make an interest payment on a foreign loan. For Pakistan, life support is a drip feed of loans from foreign friends and emergency injections from multilateral lenders.

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