A Troubled State
A dysfunctional, troubled and troublesome state all through its existence, Pakistan went into over three decades of geopolitical decline after the end of the US-led Afghan Jihad against the Soviet Union. Having defeated the Soviets, the West turned its back on Pakistan and external assistance dried up. Infested with religious extremism as a result of its encouragement over the years by the Pakistani establishment, more particularly during the Afghan war, Pakistan doubled down on the policy of using radicalised proxies to perpetrate terror for achieving its foreign policy ends. Increasingly, terror attacks around the globe were traced back to Pakistan. 9/11 was a stark reminder of that linkage. Pakistan joined the US War on Terror under duress, but the US-Pakistan relationship soured gradually owing to growing evidence of Pakistan’s double dealing on terrorism, its continuing to provide sanctuaries and more to the Afghan Taliban and the killing of Osama bin Laden in a US raid in Pakistan’s garrison town of Abbottabad. By this time, many of Pakistan’s proxies had also turned against it, resulting in an intense phase of terror within Pakistan.
The short collaboration between the US and Pakistan during Trump’s first tenure to facilitate a US accord with the Afghan Taliban for exit of their forces from Afghanistan did not result in a more productive relationship. The initial neglect during the Biden administration turned into a sharp downturn when the then Prime Minister Imran Khan accused the Americans of conspiring to oust him from power. Pakistan’s Muslim partners in West Asia were also reluctant to finance its profligacy and wary of extremism and terrorism flowing into their countries. Pakistan was increasingly friendless with the exception of China, which had chosen to make a large investment in the strategically important CPEC. But slowly, they became lukewarm towards CPEC projects, other than the Xinjiang-Gwadar linkage, because of Pakistan’s unstable economy and growing terror attacks against their personnel and interests in Pakistan. At this juncture, the Pakistan army engineered a change of government to get rid of an increasingly powerful and assertive Imran Khan, thereby setting in motion a period of intense political turmoil. Heavy rigging by the army to ensure Imran’s defeat in the 2024 election added to the trend. Pakistan was simultaneously going through a period of economic upheaval, characterised by low growth, high inflation and a distinct threat of sovereign default on its external debt; a rising wave of terror, which intensified following the Taliban victory in Afghanistan; and growing alienation and discontent in Balochistan and the tribal belt.
The foregoing presented the picture of a country in terminal decline, increasingly incapable of being relevant to the region and the world in any positive way. There were predictions of imminent collapse of the Pakistani state.
Geopolitical Recovery
From the above dismal situation, Pakistan is widely assessed to have made a smart geopolitical recovery in 2025 due to the following developments:
First, Army Chief, Asim Munir, who faced stiff opposition from Imran Khan and his party PTI as well as from some elements within the army, after his appointment to the post in 2022, has managed to stabilise the political situation under his complete control through strong arm tactics. The PTI agitation against him has fizzled out. The party leader Imran Khan remains incarcerated on suspect charges. Munir has ruthlessly weeded out opponents within the army, the latest example being the 14-year prison sentence awarded to ex Director General ISI, Faiz Hameed, who was close to Imran Khan, on dubious charges. He has emasculated the judiciary through constitutional amendments and supersession of independent minded judges . The civilian government acts as his handmaiden. He got himself designated as Field Marshal. Finally, he has coerced the Parliament into passing a law that gives him a tenure of five years from November 2025, with possibility of further extension, as Chief of Defence Forces. He would thus exercise control, besides the army, over navy and air force also. The Parliament has also granted him immunity from any legal proceedings for life.
Second, some ticking bombs in the economic arena have been defused as a result of an ongoing $7 billion Extended Fund Facility (EFF) from the IMF and rolling over of Pakistan’s debt by its principal creditors such as China, Saudi Arabia and UAE. Pakistan’s foreign exchange reserves stand at $20 billion approximately, enough to finance around three to four months of imports. The threat of an imminent sovereign default has thus disappeared. Inflation has come down to a single digit level from 30 to 40% at the peak of the crisis.
Third, terror within Pakistan remains rife, but the era of most terror attacks around the globe tracing their origin to Pakistan has virtually come to an end. This has gradually attenuated Pakistan’s image as a source of international terror. It is also the cause of our protests on cross border terrorism from Pakistan not registering at the international level in the manner they did only a few years ago.
Last, but the most important, development is the Trump administration cosying up to Pakistan and its strongman Asim Munir for various reasons explained in the Ananta Insights, Vol 09 Issue 05 (October 2025). Besides the interest of the Trump family in crypto business in Pakistan, the notable factors are the American interest in Pakistan’s critical minerals and the Trump administration’s desire to involve Pakistan in the security architecture of West Asia under US tutelage. This has given Pakistan a powerful external linkage that it has always craved, in spite of its growing dependence on China, but has enjoyed only in fits and starts during phases of a transactional relationship with the US.
How Durable is Pakistan’s Geopolitical Recovery?
This is not the first time that Pakistan has made a geopolitical recovery. Its international stock has gone up each time it has entered into a transactional relationship with the US. Thus, it happened when Pakistan entered into a treaty relationship with the US in 1950s, then again when it joined the US in the Afghan jihad and finally, when it joined, albeit half-heartedly, the US War on Terror. However, each time it squandered the opportunity offered by such recovery to build a brighter and sustainable future for itself. This was both because each of the above transactional phases ended in a disaster for both the parties, but also because of Pakistan’s internal structural flaws that have repeatedly pulled it down. The pitfalls for the ongoing phase of bonhomie between the US and Pakistan have been examined in the aforementioned volume of Ananta Insights. Therefore, this essay will confine itself to looking at the impact of Pakistan’s perennial structural fault lines on its efforts to get out of the quagmire in which it found itself in recent years.
First, the dysfunctionality of the Pakistani state caused by the civil-military imbalance and constant tussle between the civilian authority and the army seems to have been overcome temporarily by the all-powerful role assumed by Asim Munir in the so-called ‘hybrid system’. There were phases earlier when this happened as a result of assumption of direct control by military strongmen through coups d’état. However, all such strongmen have been subject to the logic of the proverb: “Those who live by the sword, die by the sword.” Ayub Khan and Pervez Musharraf were brought down by the public disenchantment with their rule, Yahya Khan went out in ignominy following Pakistan’s crushing defeat in the 1971 war and Zia died in a plane crash about which conspiracy theories abound to this day. Munir will be no exception. Having thrust himself to the fore in controlling the entire state machinery, he cannot blame the civilians for failures of governance down the road. His intention to linger on both as the Chief of Army Staff and Chief of Defence Forces will sooner than later cause discontent among higher echelons of the armed forces. Incarcerated Imran Khan remains popular among people. Therefore, someday, Munir will fall victim to the same dynamics that led to the downfall of the earlier military strongmen.
Second, while Pakistan’s economy has moved back from the brink, it is not out of the woods. Its structural problems, such as low resource mobilisation, spending far beyond means due to the heavy defence expenditure and general profligacy in governance, reluctance of the army-led elites to give up their privileges and dependence on heavy internal and external borrowing are far from resolved. Consequently, sustainable macroeconomic stability is not assured and the economy may reach a breaking point again as it has periodically in the past. Growth remains low between 2 to 3%, nearly the same percentage as of population growth. Budget deficit remains high over 5%. Pakistan’s external debt repayment obligation remains heavy and repayments have been pushed down the road by rolling over loans. In the past, Pakistan has always failed to fulfil its commitments to the IMF. The ongoing EFF has not run into trouble so far partly because Pakistan enjoys the US support. A recent IMF report states that corruption is a persistent feature of Pakistan’s governance; there are systemic and structural weaknesses in the management and use of public resources; and accountability institutions lack sufficient competencies and independence. IMF continues to stress comprehensive reforms that address both immediate vulnerabilities and long-term institutional weaknesses. With Pakistan’s internal dynamics, this is not certain.
Third, the Baloch and Pakhtun fault lines in Pakistan remain as deep as ever because of the state’s dependence exclusively on force to deal with the unrest among them. If anything, the Baluchistan situation has worsened in recent years and the Pakhtun fault line has become more dangerous because of the fallout between Pakistan and the ruling Taliban regime in Kabul.
Fourth, the terror wave in Pakistan has spiked since the Taliban takeover in Afghanistan. According to South Asia Terrorism Portal (SATP), as against 268 incidents of terror in 2021, resulting in the killing of 215 civilians and 226 security personnel, Pakistan has seen 1019 incidents in 2025 that killed 620 civilians and 1136 security personnel. Unlike the terror wave in the first decade of this century, Punjab and Sindh remain largely spared this time, but this could change.
The aforementioned factors, seen in the light of the past pattern, would suggest that the ongoing phase of rise in Pakistan’s fortunes will more likely than not run into its structural problems and be cut short down the line.
Implications for India
While the ongoing upswing in Pakistan’s fortunes may not last, any policy predicated on collapse of the Pakistani state would by unrealistic. No major power wants that outcome. Further, our past experience tells us that Pakistan, when basking in the glory of US fawning and attention, has tended to be more adventurous towards India. Currently, there is virtually no diplomacy between the two countries and they are dependent on coercion- overt and covert- to manage the relationship. There has been a surreal sense of triumphalism in Pakistan following Operation Sindoor. Asim Munir is a hardliner and prone to risk taking. Therefore, India will have to keep its guard up against any misadventure by Pakistan.
The previous issue of US-Pakistan Diplomatic Reset – An Appraisal are available here: LINK
