Pakistan labelled India’s suspension of the Indus Waters Treaty as “an Act of War
Digital Desk: Following India's strong reaction to the Pahalgam terror strike, which took 27 lives, tensions have escalated conflicts immensely between New Delhi and Islamabad. After Pakistan's Prime Minister Shehbaz Sharif led a high-level meeting on Thursday, Pakistan disclosed various countermeasures, including a suspending of all trade with India, followed by Indian diplomats expulsion and rejecting visas, and closing its airspace to Indian flights.
Most notably, Pakistan labeled India's Indus Waters Treaty suspension an act of war while promising to fight back at every national power level across the country. However, the experts doubt Pakistan's ability to launch an escalation given its severe economic situation its weak fiscal state.
Five fundamental economic factors show that a war would be extremely difficult to sustain for Pakistan:-
Record Low Foreign Reserves: The State Bank of Pakistan reported foreign exchange reserves of just $11.09 billion as of March 7, down $152 million from the previous week, largely due to external debt repayments.
Soaring External Debt : The external debt of Pakistan reached $131.1 billion during December 2024. The nation will need to repay over $100 billion to borrowing countries over the next four years.
The country continued using International Monetary Fund (IMF) aid by obtaining a $7 billion loan in September 2024. The IMF has identified severe structural weaknesses within the country's economy.
Suspended U.S. Aid: The Trump administration suspended USAID funds to Pakistan, a decision still under review as of April 26, adding further strain to the economy.
Political Instability: No prime minister in Pakistan’s history has completed a full term. Frequent changes in leadership and corruption scandals have further weakened governance.
The increased economic and political pressures make Pakistan more vulnerable to counterproductive actions through aggressive diplomacy.
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