RCSS Policy Studies 

The controversial advent of India and Pakistan into the global nuclear club following the nuclear tests of mid-1998, and the subsequent complications in Indo-Pak relations has brought South Asia into the international limelight. On the one hand, a series of confidence building measures had been initiated over the past several months by governments of both countries. But on the other hand, India and Pakistan continue to disagree more obdurately and fiercely than ever before, on the resolution of the long-standing Kashmir dispute and other related issues such as terrorist activities and arms proliferation in Kashmir Valley. Given these circumstances, it is not surprising to find a vigorously renewed interest in studies pertaining to patterns of cooperation and conflict among the major South Asian countries. In like manner, this project seeks to examine the prospects of regional cooperation in South Asia on the basis of the indicators of order, welfare and legitimacy in this part of the world. The fundamental objective of such research is to present a theory that explains the patterns of cooperation and conflict in South Asia, along with possible solutions for ameliorating some of the ills of this part of the world. The project may also contribute to the larger concern of regional studies in the Third World while tackling the question of the “region-ness” of South Asia.

The paper begins with an introduction to the main propositions. Thereafter, it provides an overview of South Asia as a whole, as also country-specific profiles of India, Pakistan, Bangladesh, Nepal, Sri Lanka, Bhutan and the Maldives. Subsequently, it outlines various aspects of interstate relations in South Asia, with particular emphasis on the conflictual issues. The South Asian Association of Regional Cooperation (SAARC) and other related economic issues have also been stressed in this section. This is followed by an in-depth evaluation of the security concerns of South Asia, with special reference to the Indo-Pak arms race, and the nuclear developments in both countries. Recent events, such as the Kargil crisis and its aftermath, have also been tackled in this section. The paper then concludes with the issue of the ‘region-ness’ of South Asia, thereby highlighting the problematic areas as well as the prospects of cooperation.

Introduction
The present study attempts to explain the lack of cooperation in South Asia in terms of its shortcomings as a region. The main contention here is that South Asia is still in the process of evolving as a “region” due to two basic factors: first, an adequate degree of complementarity of interests has not yet been achieved among the South Asian states; and second, the almost perpetual preoccupation with intrastate conflicts and crises leaves individual states with scarce time or resources to work towards regional solutions.

At the very outset, it would be useful to elaborate upon these two points, and consequently, outline the broad parameters of this study. Basically, a region can be defined on the basis of certain specific indicators which confirm its existence or otherwise. For the purpose of this study, a set of countries in close geographical proximity to each other can be categorized as a “region” when, first and foremost, they share a certain commonality of (national) interests. These interests could incorporate a whole gamut of social, economic, political, cultural, historical and other factors. Second, this set of countries should be sufficiently enlightened so as to understand the significance of placing cooperation above conflict in the conduct of interstate relations. This should also be bolstered by a collective desire to come together on a common plank to technically evolve some lasting mechanism for regional cooperation. These sentiments are more or less lacking among the South Asian states, as is evident in years of lacklustre performance of the South Asian Association for Regional Cooperation (SAARC). As subsequent pages will indicate, following the conception of SAARC in 1983, very little has been actually done to promote this sole existing mechanism for collective cooperation in the subcontinent.
Such lack of “region-ness” in South Asia can also be understood in terms of another related phenomenon, that is, the persistence of myriad social, economic and political problems in practically each and every South Asian state. As elaborated shortly, such intrastate problems are often either the cause or the consequence of interstate disputes and misperceptions. Thus, there emerges an inextricable connection between the internal and external relations of South Asian states, with patterns that are further complicated by what has been succinctly explained as the pursuit of “order, welfare and legitimacy”. This triad has been adopted in the theorizing of Edward Kolodziej as part of his explication of the occurrence of regional conflicts across the globe. The main proposition of Kolodziej’s theory is that international relations involve the global pursuit of order, welfare and legitimacy, as represented by the acronym “OWL”. In other words, this implies that the nation states and peoples of the world are engaged in a ceaseless struggle to define authoritatively what systems of order and welfare should prevail for their respective societies. If these systems of order and welfare are perceived to work and if they are also viewed as just or fair, then they are invested with legitimacy, that is, with authority which sanctions how the peoples and nations of the world believe they should be governed and how they should pursue their welfare needs, within the framework of global concerns. A corollary of Kolodziej’s theory is that the occurrence of conflicts, either at the national or the international level, adversely affects the OWL imperatives and hence, the conduct of international relations in the region involved.1

In adapting the “OWL Theory” to the South Asian context, the present study shows how most of the South Asian countries have inadequate levels of order, welfare and legitimacy owing to the persistence of various intrastate and interstate conflicts. The converse also holds true. Such dismal circumstances also affect the prospects of regional cooperation among the states concerned. Not surprisingly, even the rest of the world views South Asian countries with reservation, often bordering on pessimism.

An Overview of South Asia
Viewed from either the global or the regional perspective, South Asia provides a disappointing picture in every social, economic and political context. Taken collectively, though the Governments of India, Pakistan, Bangladesh, Sri Lanka and Nepal have been making efforts to improve their socio-economic conditions through democratic means, these attempts have often been frustrated against the background of colonial rule and societies behest by extraordinary religious, ethnic, and linguistic complexity. Among the issues related to welfare, the most important concerns of South Asia include limiting population growth, raising literacy levels, and addressing environmental degradation. South Asia today contains 20 per cent of the world’s population. At present levels of growth, the most recent World Bank projections for the year 2025 put India’s population at 1.3 billion, Pakistan’s at 244 million, Bangladesh’s at 180 million, Nepal’s at 38 million, and Sri Lanka’s at 24 million. These high rates of population growth threaten to undermine the benefits of economic development as well as advances in agricultural productivity, and place massive pressures on the land and its resources. With a substantial population living below the poverty line in most of the South Asian countries (one-third, in the case of India) and with extremely low Physical Quality of Life Indices (39 for a well-established democracy like India), none of these nations can really afford added detriments to their overall growth and progress.2 In fact, South Asia contains more people living in abject poverty than any other part of the world. Furthermore, the migration of the landless into cities exacerbates urban environmental problems and creates opportunities for socio-political unrest. The movement of people across the subcontinent’s borders in search of food and employment causes friction within and between the regional neighbours. Moreover, despite some improvements in the past four decades, the literacy rates remain disappointingly low throughout most of South Asia, especially for females and in the rural areas. The overall adult literacy rate for India is an estimated 48 per cent, for Pakistan and Bangladesh about 35 per cent, and for Nepal 26 per cent. High illiteracy rates stifle family planning efforts, limit farmers’ ability to utilize technological improvements, and reduce labour efficiency in the general manufacturing sector. Only Sri Lanka has achieved solid success in improving literacy, with literacy rates close to 90 per cent. Although most of the South Asian countries have recently initiated varying degrees of economic reforms by adopting liberalization and free market economic policies, the pervasive and innate character of their domestic/regional problems tends to negate most of the constructive efforts.

According to a 1997 Report of the Human Development Centre, South Asia is fast emerging as the poorest, the most illiterate, the most malnourished, the least gender-sensitive—indeed, the most deprived region in the world today. And yet it continues to make more investment in arms than in the education and health of its people. The per capita GNP of South Asia ($309 in 1993) is lower than any other region in the world. To reiterate a statement made above, nearly 40 per cent of the world’s poor live in South Asia. While the region contains 22 per cent of the world’s population, it produces only 1.3 per cent of the world’s income. The adult literacy rate (48 per cent) in South Asia is now the lowest in the world. Its share of the world’s total illiterate population (46 per cent) is twice as high as its share of the world’s total population. There are more children out of school in South Asia than in the rest of the world, and two-thirds of this wasted generation is female. The UNICEF Report titled “The State of the World’s Children, 1999” has pointed out that given the enormity of illiteracy, it would take an additional US$1.6 billion in South Asia each year for the next ten years to educate all children.3

According to another recent UNICEF study, the worst affected region for malnourished children is South Asia, not Sub-Saharan Africa. Half the children in South Asia are underweight, compared to 30 per cent in Sub-Saharan Africa, despite the much higher GNP growth rate and a more robust increase in food production in South Asia. Further, South Asia’s Gender-Equality Measure (GEM), prepared by UNDP’s Human Development Reports to reflect economic and political opportunities open to women compared to men, shows the lowest value (0.235) among all the regions in the world. South Asia is also the only part of the world that defies the global biological norm, with only 94 women for every 100 men (instead of 106 women to 100 men as in the rest of the world), so that 74 million women are simply ‘missing’. The extent of human deprivation in South Asia is also colossal: about 260 million people lack access to even rudimentary health facilities; 337 million lack safe drinking water; 830 million have no access to basic sanitation facilities; and over 400 million people go hungry each day.4

Every year since 1990, the UNDP has commissioned the Human Development Report by an independent team of experts to focus world attention on the need to put people at the centre of development. Table 1 gives the ranking of all seven South Asian states as per the Tenth UNDP Human Development Report 1999, released in India in July 1999. This ranking is based on a Human Development Index (HDI), which is a combined measure of longevity, educational attainment and ability to buy basic goods and services. While Sri Lanka tops the list as the most developed, Bangladesh emerges as the least developed country in South Asia.5

Despite such glaring backwardness, South Asia is one of the most militarized regions in the world. The widespread human deprivation contrasts sharply with large armies, modern weapons, and expanding military budgets in the region. Indeed, two of the largest armies in the world are in South Asia, and it is also the only region where military spending (as a proportion of GNP) has gone up since 1987; it declined substantially in all other parts of the world after the end of the Cold War.6

Environmental degradation in South Asia is analogous to the region’s population problem apart from having several negative socio-economic and politico-security implications. The dependence of the poor regions of South Asia on their natural resource base, such as soil, water, forests and fisheries is self-evident. And yet, environmental abuse is rampant here to an unbelievable degree. Deforestation (a particular problem in Sri Lanka and Nepal), soil erosion, droughts (as in Bangladesh and certain parts of India), floods (as frequently experienced in Bangladesh due to silting of rivers and channels), and urban pollution (New Delhi, the capital of India being the third most polluted city in the world today and even hitherto clean environs like those of Nepal becoming increasingly polluted) have often undermined economic growth, depleted food supplies and caused socio-political instability in South Asia. As per statistics, the subcontinent is also losing a considerable amount of productive land due to waterlogging and salinity. In India alone, over 3 million hectares are believed to be affected by salinity and up to 8.5 million hectares by waterlogging. Nearly 5 million acres of forests are cut down each year in South Asia, with only feeble efforts at reforestation. Fresh water resources are being depleted at a rapid rate—by as much as one-third in Pakistan during the 1980s. Moreover, such problems also have “spillover” ramifications (like aggravating global warming and depletion of the ozone layer). And most of these environmental problems finally link up with the desperate poverty of people in South Asia: due to lack of any viable alternatives for sustaining their livelihoods, they have no choice but to denude and destroy the very land, forests and water resources that they live on, little realizing that these resources are not everlasting.7

Furthermore, South Asia is an area of tremendous political complexities. Certain South Asian states like Pakistan and Bangladesh have been largely ruled by authoritarian, military rulers. In fact, the former has had the dubious distinction of being labelled as a “Garrison state” (literally, a fortified state furnished with military troops) due to its lengthy trysts with military regimes. Even during the times when Pakistan claimed to be a democracy (as, for instance, during the premiership of Benazir Bhutto), in reality there were irreconcilable differences between the democratically-elected Prime Minister and the President who is usually backed by the military-bureaucratic junta. As in the case of Bangladesh, Pakistan’s military intelligence agencies (like the Inter-Services Intelligence, or ISI) reportedly exercise a crucial influence over the country’s national and international affairs.

The election of democratic governments in South Asia had accompanied raised expectations by citizens of the region for a better life (related to the imperative of welfare). Hence, failure by elected governments to deliver economic and social benefits sought by the citizens has repeatedly undermined the faith in democracy (and subsequently the legitimacy of the system) in South Asia. In Nepal, for example, it has been felt that the democratically elected governments have failed to produce any better results than the old royal regime, and that corruption is as widespread as ever. Besides, ethnic and religious conflicts are posing major threats to the democratic governments of South Asia. In addition to creating law-and-order problems, increased human rights violations, and a heavy reliance on security forces (all indicators of dysfunctionality of the order imperative), such conflicts divert the attention and resources of governments from urgent socio-economic needs, undermining their ability to satisfy the demands of the electorates (that is again the question of legitimacy). In South Asia, the problem of civil violence has in recent years emerged as a more serious security issue than the problem of interstate warfare. India has been variously preoccupied with quelling conflicts in the states of Punjab (due to the separatist demands of the often-violent Akali community), Kashmir (an issue which remains contentious between India and Pakistan, and has certain religious, ethnic, psychological and economic underpinnings) and the North-Eastern states (stemming from ethnic and regional movements in Assam, Nagaland, Mizoram, Tripura, etc.). The law-and-order situation is insecure in most of the rural areas and the Indian Government is said to spend nearly $9 million per day to maintain about half a million security forces in Kashmir alone. Moreover, the Indian Government announced a huge increase of 21 per cent in the country’s defence spending since 1990–91.8 (Further military data follows on subsequent pages.)

On the economic front, the initial pace of market reforms adopted by India in 1991 has been slackening over the past few years. Though many global giants and institutional investors agree that India is a future market, they don’t really seem to be in a hurry to invest here. And a feeling of disillusionment with the pace of Indian reforms as well as with the Indian Government’s commitment to improve the basic infrastructure and to alleviate endemic economic problems has been growing even in international circles. Thus, India is far from becoming a much-favoured destination on the economic map of the world, even as political uncertainty and slow policy change figure high on the long list of irritants. Discussions at the 1998 World Economic Forum held in New Delhi also conceded that even as South-East Asia has been rejuvenating itself at a remarkable pace, India (as also the rest of South Asia) has fallen sharply in the ranking of foreign investment, primarily due to its inability to sustain the pace of reforms. A survey conducted by consultants A. T. Kearny showed that Indian companies registered an alarming 21 per cent decline in investor preference over the latter half of 1998. The fact that South-East Asian countries have far outstripped India in the past two decades, and even after their mid-1998 financial debacle, have a much higher per capita, was aptly summed up in the words of Percy Barnevik, the Chairman Investor AB as, “I keep hearing that India escaped the South-East Asian problem because it went slow. Frankly, I don’t mind losing 100 per cent after a growth of 500 per cent.”9

Neighbouring Sri Lanka has also had its share of socio-economic problems. Democracy in this tiny island-nation remains overshadowed by the Tamil-Sinhalese ethnic conflict and frequent outbursts of Sinhalese militancy. These conflicts have stymied the Government’s economic reform efforts and polarized political debate. Simultaneously, continued political instability has equally been the result of Tamil militancy. In Pakistan, the society faces sporadic bursts of violence emanating from ethnic, sectarian and religious differences in its diverse community. For instance, the conflict in the Sindh province between ethnic Sindhis and those residents who migrated from India following Partition has made the province, specially its capital, Karachi, ungovernable. Conservative religious elements are also very powerful in Pakistan, leading to tensions and conflicts over religious fundamentalism, which has also played a major role in sustaining the Indo-Pakistan altercations over Kashmir. Religious orthodoxy is evident in Bangladeshi society as well, manifesting itself in attacks on women’s groups, prominent non-governmental organizations (Bangladesh Rural Advancement Committee and the Grameen Bank), and the intellectuals (like Taslima Nasreen). In Sri Lanka, religious chauvinism, intensified by the corrosive effects of years of civil war, is powerful and erodes the tolerance that is imperative for maintaining the country’s democracy. All this can largely be attributed to the fact that political and governing institutions in most of the South Asian countries are weak, while the political parties themselves lack vigour, organization, discipline, and commitment.

Country-Specific Profiles
Taken individually, each of the South Asian states suffer from some kind of instability, and consequently, projects varying intensities of human deprivation.

India
In India, 291 million adults are still illiterate and 45 million children were out of primary schools in 1995 alone. Out of the total population, 44 per cent lives in absolute poverty and nearly one-third of the world’s poor live in India. Another stark reality is that India has the largest illiterate population in the world: it has almost 2.5 times more illiterate people than the whole of Sub-Saharan Africa. In its report, “State of the World’s Children—1999”, the UNICEF had several disquieting things to say about India. According to this report, India will be the world’s most illiterate nation by the turn of the century. As it is, two-thirds of the total number of the illiterate in India are women. The country also has the maximum number of school dropouts, and every third illiterate in the world is an Indian. Equally distressing is the fact that while 46 per cent of India’s population survives in absolute poverty, with an income of less than US$1 a day, about two-thirds are “capability poor”: that is, they do not receive the minimum level of education and health care necessary for functioning human capabilities. On the Human Development Index, India ranks 132 out of 174 nations. Children and women bear the brunt of human deprivation in India. About 62 million children under the age of five are malnourished. According to another recent UNICEF study conducted across the country, gross malnutrition accounts for more than half (about 55 per cent) of the total child mortality in India. In a majority of low-income families in rural India, girls suffered up to seven times more from malnutrition than the boys. Pointing out that malnutrition was imposing a tremendous burden on the national economy, the study showed that annual national loss in terms of economic productivity was estimated to be close to Rs. 1,200 billion. Moreover, nearly one-third of the children under 16 are forced into child labour. Of all pregnant women aged between 15 and 49 in the country, 88 per cent suffer from varying degrees of anaemia. Unemployment, in general, is becoming a serious problem in India. About 7 million people are added to the labour force every year, and they are increasingly educated. “Jobless growth” of the type being witnessed in the country has left a majority of the population unaffected by, and dissatisfied with, the forces of economic growth. And yet, in the face of all this, India was ranked first in arms imports, but 147 in per capita income.10

The crux of many socio-economic problems in India seems to be the country’s population explosion. The unchecked addition of about 20 million people every year to a large multi-ethnic, multilingual and multireligious country portends dangers that need to be dealt with on a war footing. India does have the potential to become one of the leading economic powers of the world. But its burgeoning population and consequential problems like poverty, hunger, and social injustice are a serious hindrance to the realization of that potential. In fact, the country’s population has trebled since 1947.11 The reasons for this are well known: deep-rooted traditional beliefs and lack of education, a high child mortality rate motivating parents to have more children, for more children mean more income, the stigma against the girl-child and the suppressed, secondary role of women, and in certain communities, religious orthodoxy prohibiting family planning.

Several studies show that India has had a long history of social, economic and political turmoil. Fat programmes of economic and social progress have so far produced few fruits for the general masses. Years of expected growth have actually just been years of gap—gap between promise and performance, between the fabulous luxury of the few and the abysmal misery of the many, as also between a supposedly impressive liberal democratic structure and the arbitrary exercise of political power.12 Recent years have also witnessed dramatic ups and downs in the Indian economic scenario, with the present situation being far from satisfactory. By staying away from the global trends towards liberalization and free market economy until 1991–92, all that India could achieve was a huge current account deficit of $9.7 billion. The foreign exchange reserves had fallen to a record low of $1.1 billion. By mid-1991, the Reserve Bank of India (RBI) had to airlift nearly 47 tonnes of gold to London as security for a loan of $400 million from the Bank of England and the Bank of Japan. With bankruptcy knocking at the doors, the Government of India was left with no other option but to open up the Indian economy. Under Narasimha Rao’s leadership, the then Congress Government had initiated an impressive economic reforms programme, and the Indian economy was beginning to recover by 1992–93. The next two years saw more dramatic changes as the country surged towards liberalization and a free market economy. But from 1995–96 onwards, in tandem with the growing political instability, economic growth in India has also been increasingly curtailed.13

According to a forecast by the Institute of Economic Growth (IEG, a Delhi-based think-tank) in April 1999, the Indian economy is unlikely to come out of the current slowdown in the next two years, with the GDP growth rates likely to be in the range of 5.8 to 5.9 per cent. The study, Economic Outlook for India: 1999–2000, projected an average GDP growth rate of 6.1 per cent for the remaining three years of the Ninth Five Year Plan (1997–2000). This is significantly lower than the average 7 per cent growth for the next three years, as projected in the Indian Government’s Ninth Plan document itself. Even the World Bank had forecast that an economic turnaround would begin only in mid-2000, that too, being heavily dependent upon the political situation of the country at the turn of the century. Moreover, the Asia Development Bank (ADB) warned in March 2000, that India was vulnerable to a major currency crisis due to weaknesses in its financial sector and economy.14 In light of the continued political instability within India, the International Monetary Fund (IMF), in its “World Economic Outlook” (WEO) of 1999, sharply criticized India for not carrying out the much-needed economic reforms since 1996. The IMF said that India has missed an opportunity to grow 1.5 to 2.5 per cent faster by slowing down its reform process and singled out stalling of the structural reforms process and deterioration of the Government’s finances as a main factor for the economic downslide.15 Following the general elections of September 1999, a spate of events including mounting defence spending in the aftermath of the Kargil war (details follow), rising food subsidy due to record foodgrain stocks, virtually stagnant income and corporate tax revenues, election expenses and cost of delayed decision making, soaring global oil prices, and burgeoning interests payouts are said to have left the Indian Government in the doldrums.16

Pakistan
Pakistan’s social and human indicators also make very dismal reading. In the context of development, the governments in Pakistan have been up against a crisis that has four features: widespread poverty; rapid and unplanned urbanization; rising debt; and rapid erosion of the natural resource base. Over two-thirds of Pakistan’s adult population is illiterate and there are 740,000 child deaths a year, half of them linked to malnutrition. Pakistan is also experiencing one of the fastest rates of urbanization in the developing world which may result in the urban population exceeding the rural by the turn of the century. At the same time, the population growth rate at around 3 per cent per annum is the highest in South Asia. According to long-term UN projections, Pakistan will emerge as the third most populous country in the world by the year 2050. Already, 36 million of the population live in absolute poverty. According to statistics, poverty has actually worsened over the past one decade: nearly 40 per cent of the population now lives below the poverty line. More than half of the cultivable land in the holdings of 50 acres and above, is in the hands of big landlords, thereby encouraging the rich-poor divide to further widen. Even after five decades of independence, Pakistan has remained an essentially feudal society.

With their conservative economics and fickle political loyalties, the feudal landlords are to said to blame for Pakistan’s disastrous economy and chronic political instability. Using their legislative strength and government connections, a few thousand elite families have staved off efforts to distribute land more equitably, a major reason why agricultural productivity remains low. Most have also resisted the implementation of an agricultural tax—as repeatedly demanded by the International Monetary Fund—to help defray the country’s acute fiscal deficit. And successive parliaments dominated by feudal landlords have paid little attention to Pakistan’s dire social needs, making it one of Asia’s poorest and most illiterate nations. Furthermore, despite enjoying the privilege of an elected female Prime Minister for a few years, the status of women in Pakistan is very low. Apart from being subjected to subjugation through several orthodox customs and traditions, female mortality is disproportionately high in Pakistani society. Against 100 males, only 16 females are economically active—the lowest ratio in the SAARC region. Likewise, the share of women in Parliament is also the lowest in South Asia.17

While the overall state of human development is poor in Pakistan, widespread regional disparities make the situation even worse. For instance, urban Sindh has the highest Human Development Index (0.537), comparable to Zimbabwe, but rural Baluchistan has the lowest HDI (0.388), at par with Zaire. These regional disparities also indicate that the task of national integration in Pakistan is difficult since it requires both a major investment in accelerating the pace of human development as well as ensuring a special emphasis on less developed regions, particularly in rural areas. At the same time, the treasury is worse off than broke—it owes roughly $30 billion to domestic creditors and another $30 billion abroad. Graft is so shameless that Transparency International, the German-based monitoring group, has named Pakistan as one of the five most corrupt countries in the world.18

Continuing further, ethno-national problems of political autonomy have plagued Sindh, Baluchistan and the North-Western Frontier Province of Pakistan since the 1950s. The ethnic issue drew worldwide attention with the 1971 dismemberment of Pakistan, that subsequently led to the creation of Bangladesh. The situation is said to have worsened in recent years with ethnic conflicts between Pathans, Mohajirs, Sindhis and Punjabis assuming serious proportions. For example, in 1986 more than 300 people were killed in riots between Mohajirs and Pathans in Pakistan. Estimates also show that more than 3,000 Sindhis have been massacred in the country since 1971 and countless others are ‘missing’. Since the early 1990s, many Pakistani cities such as Karachi (the capital of Sindh) have become battlegrounds for rival Islamic sects (the Sunnis versus the Shias) and widespread sectarian violence now perpetually poses a crisis of legitimacy for the ruling Pakistani Government. More than 1,000 people are reported to have been killed in sectarian clashes in several parts of Sindh during 1998 alone, forcing the authorities to repeatedly declare emergency in this strife-torn province.19

From the purely economic viewpoint, even though Pakistan initiated reforms prior to India, the former’s track record is much worse than that of the latter. Immediately after assuming office during his first term in November 1990, the then Prime Minister Nawaz Sharif announced a bold series of reforms to reduce government involvement in the economy, to privatize public sector companies and to encourage private sector growth. The Government also opened most sectors to foreign investors and reduced financial and bureaucratic obstacles to businesses. It strove to attract greater foreign inflows of capital, technology and jobs to invigorate Pakistan’s economy. While these reforms were appreciated, the economy continued to face several immediate financial and political hurdles. The budget deficit consumed a significant portion of GDP due to heavy defence spending and debt repayment, coupled with an inability to slash spending. This also threatened future loans from international lenders. The trade deficit has since widene