A Legacy of Terror & Economic Ruin

What does it say about a nation when its global contribution is better measured by the terror it exports than by its economic performance? Since its creation in 1947, Pakistan has maintained a disturbing legacy—one that continues to plague not only its own people but the entire world. While most nations pride themselves on GDP (Gross Domestic Product), should Pakistan’s contributions instead be measured in terms of GTP, or Gross Terrorism Product?

Pakistan’s involvement in terrorist activities, both regionally and globally, has been well-documented. From hosting terrorist organizations like Lashkar-e-Taiba, Jaish-e-Mohammed, and the Taliban, to its role in funding and training terrorist operatives, the country has continued to foster extremism. This is not merely an accusation but a widely acknowledged fact, reinforced by a series of terrorist attacks, insurgencies, and a global black mark of failing to counter these groups. While nations build economies to provide better futures for their people, Pakistan’s focus has often shifted toward supporting proxies for its geopolitical aims, especially against neighboring India and Afghanistan.

A History Rooted in Terrorism: From 1947 to Today

From the moment Pakistan gained independence, its trajectory was mired in conflict, particularly with India. The seeds of terrorism, however, were planted firmly during the 1980s when Pakistan, under the military dictatorship of General Zia-ul-Haq, aligned with the United States to support the Mujahideen in Afghanistan against the Soviet Union. This alignment funneled arms, funds, and training to groups that later evolved into the Taliban and Al-Qaeda. Over the decades, the nexus between Pakistan’s military and the terror outfits it sponsored grew stronger, culminating in what many describe as the state’s unofficial policy of using terror as an instrument of foreign policy.

Pakistan’s military-intelligence agency, ISI (Inter-Services Intelligence), played a pivotal role in fostering and shielding terrorist organizations. It wasn’t just the western border that faced the consequences of this terror. India bore the brunt of Pakistan-sponsored terrorism, with major attacks like the 2008 Mumbai attacks being traced back to Pakistan-based Lashkar-e-Taiba.

So, how should the growth of Pakistan be measured? If we count not just its GDP but its GTP—Gross Terrorism Product—the numbers are staggering. Over decades, the country has been implicated in numerous terrorist plots, harboring extremist groups with an agenda that prioritizes terrorism over development.

An Economic Basket Case: Military Rule, Coups, & a Dismal Economy

While Pakistan busied itself with its geopolitical ambitions through terror, its economy fell into shambles. The country has never been able to sustain a democratic government. Military coups have punctuated its political landscape, with no democratic government managing to complete a full term of five years until recently. This instability—characterized by frequent regime changes and economic mismanagement—has ensured that Pakistan’s economy never took off, unlike its neighbors.

The military’s control over the country’s politics has meant that resources are consistently diverted away from public welfare, infrastructure, and economic development toward maintaining its grip on power. The military’s unaccounted budget, including its control over large parts of the economy, continues to drain the country's already limited resources. The result? A reliance on external borrowing to sustain even the most basic functions of the state.

Inflation & the Fall of Pakistan’s Currency

Pakistan’s economic troubles are no secret. Rampant inflation, soaring prices of everyday goods, and the consistent devaluation of its currency have become the norm. In 2023 alone, inflation in Pakistan reached a historic high of 36.4%, pushing millions of Pakistanis further into poverty. Essential commodities like wheat, sugar, and cooking oil have seen price hikes that the average Pakistani can hardly afford.

Over the years, Pakistan has relied heavily on loans from the International Monetary Fund (IMF), World Bank, and wealthy nations like Saudi Arabia, China, and the UAE. Since its inception, Pakistan has approached the IMF more than 20 times for bailout packages. The loan from the IMF, amounting to $3 billion in 2023, was just one in a series of economic rescues the country has sought. As of September 2024, Pakistan has secured a new $7 billion loan from the IMF over a 37-month period. This is the latest in a series of economic bailouts the country has sought in recent years.

Pakistan's external debt stood at over $130 billion in 2022. Its external debt has continued to rise, reaching $131.4 billion recorded in December 2023. Yet, despite the severe economic crunch, Pakistan’s defense budget continues to receive massive allocations, fueling its military and its ambitions rather than addressing the needs of its citizens. In 2023, Pakistan's defense budget was allocated at PKR 1,804 billion (approximately $6.4 billion). This represented a significant increase from the 2022 budget of PKR 1,523 billion. For 2024, the defense budget has been proposed at PKR 2,122 billion (approximately $7.64 billion), reflecting an increase of nearly 15% from the previous year. This new budget allocation constitutes about 1.7% of Pakistan's GDP, maintaining the same proportion as in 2023. 

The inflation-adjusted fall of the Pakistani rupee further compounds the economic misery. Once on par with the Indian rupee in 1947, the Pakistani rupee has drastically devalued, hitting a low of over 307.75 rupees per dollar in September 2023. This ongoing depreciation of the PKR reflects the broader economic challenges facing Pakistan, including high inflation rates and a significant trade deficit, which continue to exert pressure on the currency.

The Cost of Supporting Terrorism

Despite its economic collapse, Pakistan continues to support terrorism. Its GTP has become more important than its GDP. The consequences are not just financial; Pakistan’s very fabric is unraveling. The international community has repeatedly warned Pakistan about its terrorism problem, with the Financial Action Task Force (FATF) placing Pakistan on the “grey list” for its failure to address terrorist financing. The global isolation that comes from this, combined with Pakistan’s failing economy, only exacerbates its internal crises.

Pakistani-backed terror groups continue to operate across the globe, targeting regions in India, Afghanistan, and beyond. In recent years, terror attacks in Afghanistan have also borne the fingerprints of Pakistan’s support for the Taliban. In its relationship with Afghanistan, Pakistan plays both arsonist and firefighter, nurturing the Taliban insurgency while attempting to present itself as a peace broker. But as history has shown, this double game rarely ends well. The repercussions of harboring terrorist organizations are increasingly felt as the international community grows wary of Pakistan’s duplicity.

A Ruined State: Pakistan on the Brink of Collapse?

So, where does this leave Pakistan? Its economic model is unsustainable, its society is fractured, and its political instability is a constant threat. Will Pakistan finally learn that exporting terror does not build nations, that terrorism only begets further misery? Will the Pakistani state realize that a military-first approach at the expense of its people’s welfare can only lead to greater discontent?

As Pakistan continues on this path, it risks being split into further chaos, as predicted by many experts. With regions like Balochistan already expressing dissatisfaction with the central government, and separatist movements gaining ground, the future looks bleak. The question we must ask ourselves is whether Pakistan will continue to prioritize its GTP over the well-being of its citizens, or will it finally choose a path of peace and development?

Final Thoughts

Pakistan’s history and present reality paint a grim picture. A nation that chose to focus on terror rather than development now faces the consequences of those choices. While its neighbors, like India, have embraced growth, development, and a future built on technological innovation, Pakistan remains trapped in the past—held hostage by its own military, its obsession with territorial disputes, and its reliance on terror as a tool of statecraft.

The hard-hitting questions remain: How long can Pakistan sustain this path? How much more will the world tolerate its support for terrorism? And most importantly, when will the Pakistani people rise to demand a better future for themselves?