Pakistan’s Economic Crisis and Its Diminished Role in Middle Eastern Stability

Pakistan finds itself grappling with one of the most severe economic and political crises in its history, further complicated by the divisive political tactics of the Pakistan Tehreek-e-Insaf (PTI) and its leader, Imran Khan. Although the current government, a coalition led by Pakistan Muslim League (Nawaz) (PML-N) and Pakistan People’s Party (PPP), has been trying to steer the country toward stability, PTI’s negative political maneuvers have exacerbated existing issues. Pakistan’s economic mismanagement, coupled with an increasingly inward-looking and confrontational approach by PTI, has significantly weakened the country’s role on the international stage, particularly in the Middle East, where Pakistan once played an influential role in conflict resolution and regional diplomacy.

The 2024 general elections in Pakistan delivered an unexpected outcome. Despite state repression and efforts to curtail its influence, PTI won the largest number of parliamentary seats. This victory disrupted decades of established political norms where military backing often ensured a party’s success. However, rather than delivering a positive shift in governance, PTI’s leadership has used this electoral success to deepen political divisions and stall critical reforms. PTI’s political tactics—marked by street protests, refusal to engage in constructive dialogue, and inflammatory rhetoric—have undermined the governance efforts of the ruling coalition, hindering Pakistan’s ability to address its economic and international challenges.

The PML-N, PPP, and their alliance have been left to manage the fallout of PTI’s disruptive influence. Instead of fostering political unity in a time of national crisis, PTI’s strategies have made it difficult for the government to implement much-needed reforms and stabilize the country’s institutions. PTI’s populist rhetoric has attracted a significant portion of the frustrated electorate, but its methods have stalled any real progress in addressing Pakistan’s structural problems. This instability has had ripple effects, weakening the country’s global standing and limiting its ability to play an active role in the international arena, particularly in the Middle East.

Economic Crisis and Debt Mismanagement

Pakistan’s economic troubles continue to escalate, with the country facing an overwhelming external debt of $126.3 billion and foreign exchange reserves that barely cover one month of imports. The financial crisis has been exacerbated by inflation, stalled economic growth, and the derailment of the $6.5 billion International Monetary Fund (IMF) program. While the ruling coalition is attempting to stabilize the economy, the ongoing political conflict with PTI has made it nearly impossible to implement the fiscal and structural reforms required to secure international support.

Imran Khan’s previous tenure as prime minister, from 2018 to 2022, contributed to the current economic instability. PTI’s economic policies prioritized short-term populist measures over the long-term fiscal discipline needed to prevent a financial collapse. During this period, Pakistan’s reliance on external borrowing increased, particularly from China, which now holds a significant portion of the country’s debt. With the country’s foreign exchange reserves dwindling and debt repayments looming, the government’s ability to manage the crisis has been further hampered by PTI’s refusal to engage in constructive opposition, focusing instead on destabilizing the government through protests and mass mobilizations.

The next three years present a particularly difficult period for Pakistan, with $77.5 billion in external debt repayments due by 2026. Major repayments to Chinese financial institutions, private creditors, and Gulf states will need to be negotiated, but Pakistan’s political paralysis makes it difficult to secure new loans or rollovers. The government’s attempts to address these issues are constantly disrupted by PTI’s tactics, which focus on political point-scoring rather than collaborative problem-solving. Without a coordinated national effort, the risk of a sovereign default grows, with potentially devastating consequences for Pakistan’s economy and its ability to import essential goods.

Pakistan’s Diminished Role in Middle Eastern Diplomacy

Historically, Pakistan has played a key role in Middle Eastern affairs, leveraging its strategic relationships with Muslim-majority countries to promote peace and stability in the region. As a nuclear power and an active member of the Organization of Islamic Cooperation (OIC), Pakistan has long positioned itself as a mediator in conflicts involving its Middle Eastern allies, including the Saudi-Iran rivalry and the ongoing Israel-Palestine conflict. However, Pakistan’s role in the region has been severely weakened by its internal instability and the negative political tactics of PTI.

The current ruling coalition, led by PML-N and PPP, has tried to maintain Pakistan’s traditional diplomatic stance, particularly in supporting the Palestinian cause and advocating for peace in the Middle East. Yet, PTI’s divisive political maneuvers have distracted the country from pursuing a cohesive foreign policy. Instead of working toward diplomatic solutions, PTI’s populism and domestic focus have resulted in a withdrawal from proactive engagement in Middle Eastern conflicts. Pakistan’s failure to assert itself in regional diplomacy during critical moments, such as the ongoing Israel-Palestine tensions, highlights how the country’s internal discord has affected its international influence.

The absence of strong Pakistani involvement in Middle Eastern affairs marks a sharp departure from the country’s historic role as a key player in the Muslim world. Pakistan’s ties with nations like Saudi Arabia, Iran, and the UAE have traditionally been rooted in economic cooperation, military support, and shared religious values. However, under PTI’s leadership and its subsequent political tactics, Pakistan has been unable to leverage these relationships effectively. This shift has diminished Pakistan’s standing in the Muslim world and weakened its ability to act as a mediator in conflicts that require the involvement of trusted regional players.

The Crisis of Governability

Pakistan is facing a deeper crisis of governability, exacerbated by PTI’s disruptive political influence. The rise of an aspirational middle class, which has been instrumental in supporting PTI’s populist agenda, has created new challenges for Pakistan’s traditional political institutions. The military, which has historically played a decisive role in civilian politics, is increasingly viewed with skepticism by the public, and its traditional role in shaping political outcomes is being challenged. PTI has capitalized on this shift, but rather than fostering constructive governance, it has deepened political instability.

This crisis of governability is further compounded by the intensifying climate crisis. Pakistan’s vulnerability to extreme weather events, such as the devastating floods that occur with increasing regularity, has stretched the country’s already limited resources. The ruling coalition has struggled to address these challenges, and PTI’s political tactics have only made it more difficult to create and implement effective climate policies. The lack of political unity has left Pakistan poorly equipped to manage the growing risks posed by climate change, which will only exacerbate the country’s economic difficulties in the years ahead.

Pakistan’s current trajectory under the leadership of the PML-N and PPP coalition is marked by attempts to stabilize the country’s economy and rebuild its global standing. However, the negative tactics of PTI and its leader Imran Khan have made this an uphill battle. PTI’s confrontational politics and refusal to engage constructively with the ruling government have weakened Pakistan’s ability to implement necessary reforms and address both domestic and international challenges.

As a result, Pakistan’s role in Middle Eastern diplomacy has diminished significantly. Where it once played a key role in promoting peace and stability in the region, Pakistan’s internal divisions have limited its capacity to engage effectively in international conflict resolution. To restore its influence and ensure its future stability, Pakistan must overcome the political paralysis caused by PTI’s negative tactics and prioritize national unity and effective governance.

Only through political stability, economic reform, and a renewed focus on international diplomacy can Pakistan hope to navigate the crises it currently faces and reclaim its role as a regional power committed to promoting peace and stability in the Muslim world. Without these changes, Pakistan risks further isolation on the global stage and deeper internal unrest.

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