Our next story is from Pakistan,
South Asia's best example of economic mismanagement.
Today, there were developments in Pakistan Occupied Kashmir.
The region has been in turmoil for the past few
days.
We highlighted this on Friday.
The people in the region were protesting over high electricity
prices.
They ended up clashing with the police.
Over the weekend, the protests intensified and today Pakistan has
given in their Prime Minister Shabbat Sharif has approved a
grant for Poka grant worth
$86 million.
There's no clarity about how this money will be used.
The people of Pok have to take Sharif at his
word
that they will benefit somehow.
We don't know if this bribe will placate the people
of Pakistan Occupied Kashmir.
But it does raise a question.
How did the perpetually broke Pakistan come up with this
grant?
How will it actually cobble the money together?
After all, Pakistans economy is in dire straits.
It owes billions of dollars in loans.
About one $25 billion is the debt to external lenders.
That's about 42% of Pakistans GDP external debt
and its not expecting high growth this year to make
up for this debt.
By the end of June their economy is expected to
grow by just
1.8%.
That's over the
2023-2024 financial year.
Its not really a good outlook for Pakistan.
High debt and poor growth,
that's what they're looking at.
So how is it suddenly finding money for Pok?
The answer may lie in another development.
Yesterday Pakistan signed a defense deal with Iraq.
It reportedly includes the sale of fighter jets,
12 jets for about $1.8 billion.
It will bring some much needed funds to Islamabad,
empty coffers and its one of the rare occasions where
the countries military is actually helping the economy.
Partially because Pakistan is selling JF Thunder fighter jets.
JF here stands for joint fighter.
Its a collaborative effort between Pakistan and its loan shark
China.
Beijing has given billions of dollars to Islamabad.
The lion share of Pakistans external debt is owed to
the Chinese.
How does Pakistan paid back?
Well, there are regular repayments
and then there are the arms purchases.
A report came out last week highlighting the different ways
that Pakistan is in Chinas pocket,
or rather how Chinas fingers are in Pakistans pocket.
Let's look at arms imports.
Between 2019 and
20/23/82 percent of Pakistan's arms imports were from China,
up from 69% in 2024.
Between 2024 to 2020, fourteen to 2018,
so from 69
it went up to more than 80%.
So China share has gone up significantly in the last
10 years.
Now friendship is one thing,
but why is Pakistan making itself completely dependent on Chinese
arms?
And these are not just small ticket items.
Pakistan is buying heavy weapons
like submarines. Last month, China launched a submarine,
the first of eight hangar class submarines it is building
for Pakistan.
The total cost is between 4:00 to $5 billion.
That's not something Pakistan can really afford.
So why and how is it buying these weapons?
Well, think about it this way.
When your loan shark asks you to buy something,
do you really have a choice?
It explains Pakistans dire economic situation.
It imports defense equipment from China.
Its debt keeps piling on,
and it has to pay back these loans with interest,
so it doesn't have enough to spend on its own
citizens.
And the citizens also get squeezed by high taxes to
generate money to pay back the loans.
In other words, Pakistan is spending big on Chinese weapons
and this is crushing Pakistans economy.
This is not exaggeration. This is not hyperbole.
Look at this latest Cypri report.
That's the Stockholm International Peace Research Institute,
or Cypri for short. Now they have a database on
military expenditure.
One metric is military expenditure as a share of overall
government spending.
Basically, for every dollar that the government spends,
how much of it goes to the military.
And this is the case for Pakistan.
Compare it to India or even bigger spenders like the
US and China.
In twenty
2214 1/2% of the Pakistani government spending was on the
military.
Every other country mentioned has less than 10%
but Pakistan is 14 1/2%.
And this shows Pakistans misplaced priorities.
How Chinese arms imports are more important to Pakistan than
its own citizens.
Unless this changes,
unless the Pakistani people get the first share of state
resources,
the country will never recover from its financial crisis,
no matter how many jets
it manages to sell.
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