Belmont Club

The market for trouble

The AFP reports that nuclear-armed Pakistan is nearly bankrupt and is looking to the West to save them:

ISLAMABAD (AFP) – Already nearly broke when the global financial crisis took hold, Pakistan now faces further woes that could take the nuclear-armed nation’s security situation closer to the edge, experts said.

The country, a frontline ally in the US-led campaign against Al-Qaeda and Taliban militants, has been forced to seek 10 billion dollars from western backers to stave of the threat of going bankrupt as early as February 2009. … Pakistan may soon be unable to pay its creditors or get further loans, forcing it to pay for imports such as oil in cash — slowing down the economy rapidly.

The biggest impact of Pakistan’s economic problems could be on its battle against extremism near the Afghan border. The country is still reeling from the bombing last month of the Islamabad Marriott Hotel, one of the few remaining symbols of foreign investment.

It’s often argued that economic development is necessary to stop terrorism. But it does so slowly. It’s also true that terrorism stops economic development. And it does so quickly. One of the best economic investments a society can make is establishing the rule of law in a civil society. Closing the factories of hate makes good economic sense. You can’t eat trouble and eventually even the blackmailed run out of money.

Political and religious extremism have kept the Pakistani economy from going anywhere. Something is wrong when a country can afford to develop nuclear weapons, bomb its infrastructure into oblivion and can’t afford the bare necessities. Maybe this is because too many regard nukes and terrorism as the bare necessities.