Pakistan doesn’t matter

The article Pakistan’s political crisis will deepen its economic misery by Julia Horowitz (CNN) writes,

“What’s known as a “balance of payments” crisis is eroding standards of living in a country still reeling from devastating flooding last year. It could “reverse the poverty gains achieved in the last two decades and further reduce the incomes of already poor households,” the World Bank warned last month.

“Pakistan’s ability to maintain payments on its debt has also been called into question. Ratings agency Moody’s downgraded the country’s credit rating in late February, noting that foreign currency reserves were “far lower than necessary to cover its imports needs and external debt obligations over the immediate and medium term.””

The World Bank speaks as if there were no money in the world to help Pakistan. No-one considers donations or a redistribution from those who have far more than they need. No-one considers favorable borrowing conditions despite an unstable political situation—how is a country to exit the such a situation if it is being ruined financially as well? A country can’t go bankrupt. A country can’t be “repossessed” by the bank. Can it?

Why is Ukraine a good investment? Well, the U.S. just recently said that money spent on weapons for Ukraine is the “best money they’ve ever spent.” Why is Greece a good investment? Because the ECB has guaranteed every bond issued by Greece for 100 cents per euro, just like they did for Deutschbank eight years ago. Greece is a great money-laundering scheme—they launder public money into private profits. The same in Ukraine. Pakistan doesn’t have anything to offer the western elites, so it can collapse, for all they care.

Our moral standard is incredibly low. The only way that we’ll offer funds to Pakistan is if it shows a willingness to neglect its population in order to pay interest on its existing debt. That is, it needs to borrow more money because it doesn’t have enough money to help its people.

However, it’s already borrowed money in the past, so it must show a willingness to pay interest—otherwise, the same lenders will be unwilling to lend more money (which will, presumably, also not be paid back, and will also not yield interest payments). So, it actually needs more money in order to—most importantly—cover the costs of past borrowing.

This all makes logical sense from a merciless economical standpoint. It’s horrifying from a human standpoint.

The people of that country suffered massive flooding in the last year (1/3 of the country was underwater at one point) and is now suffering from a massive parliamentary/constitutional crisis. It looks very much like there will be yet another military putsch—as there was when Musharraf took power in 1999. Pakistan has only since the partition in 1947 and has had 4 verifed military coups (Wikipedia).