Pakistan is going through some things.

“Multiple chickens are coming home to roost,” noted Dr. S Jaishankar in an inscrutable commentary during a recent panel at Washington’s Hudson Institute. While he didn’t specify which nation he was referring to, the context made it abundantly clear: Pakistan, the Islamic Republic flanking India’s western border, was the unstated subject.

An economy in turmoil

Pakistan’s economy has long been in precarious health, but the pandemic served as the proverbial nail in the coffin. The country finds itself in a significantly worse economic position than it has in recent memory—standing on the precipice of financial ruin while its regional neighbors demonstrate relative stability. Data reveals a grim scenario: Pakistan’s GDP growth plummeted from a somewhat encouraging 5.5% in 2018 to a dismal -0.3% by 2020.

In the first three months of 2020 alone, more than three million people in Pakistan lost their jobs, leading to a staggering unemployment rate of 9.56%. Inflation, another critical barometer of economic health, leaped from a manageable 2.6% before the pandemic to an alarming 10.74% between 2020 and 2022. Contributing to this complicated picture is the recent volatility in Pakistan’s political landscape, marked by transitions in leadership from Imran Khan to Shehbaz Sharif to the current caretaker prime minister, Anwaar-ul-Haq Kakar.

The resurgent threat of TTP

Former U.S. Secretary of State Hillary Clinton once warned, “If you have snakes in your backyard, you can’t expect them to bite only your neighbours.” The words resonate ominously in today’s Pakistan, where the Tehrik-i-Taliban Pakistan (TTP) has resurrected its campaign of terror. Ever since the Taliban established dominion over Afghanistan, the optimism once expressed by General Faiz, a former ISI director general who had proclaimed that Pakistan’s western borders were “secured,” has proven to be misguided.

The TTP, after a period of internal disarray, consolidated its power under the leadership of Noor Wali Mehsud in 2020. Pakistan’s military attributes the deaths of more than 220 soldiers and commanders in 2023 to the TTP—a group that has seen its capabilities augmented, thanks to enhanced political legitimacy and an influx of trained militants and resources. Much of the TTP’s operations are coordinated from Afghanistan, and their territorial gains in Pakistan’s southern districts further underscore the critical nature of this threat.

The China factor

China, often dubbed Pakistan’s “all-weather ally,” presents a complex scenario for the beleaguered country. On the one hand, China has offered substantial financial support through its Belt and Road Initiative and the China-Pakistan Economic Corridor. On the other, this assistance is increasingly viewed through the lens of debt-trap diplomacy. Financial analysts have observed a reticence on China’s part to double down on its multi-billion-dollar commitments, likely stemming from apprehensions over Pakistan’s floundering economy. Although China has agreed to reschedule over $2 billion in debt, it has also demanded repayment for existing loans, adding further strain to Pakistan’s beleaguered fiscal condition.

A murky horizon

While Saudi Arabia and the IMF offer bailout packages as potential short-term remedies, such assistance is unlikely to resolve the structural issues that have ensnared Pakistan in a relentless cycle of crises. These are compounded by the unwillingness of the current Afghan administration to take on the TTP and the growing indications that China might adopt a more cautious approach in its financial dealings with Pakistan. As long as these variables remain, Chinese largesse is likely to come with even more stringent strings attached.

In this intricate matrix of economic, political, and security challenges, Pakistan’s future seems precariously balanced on a tightrope. Unless transformative solutions are implemented, the country’s spiral into a multifaceted abyss may become irreversible.