Pakistan's Finances

The people of Chicago know a thing or two about how to handle personal finances during a time of economic trouble. With local institutions like Northern Trust, Bank of America and The Center for Financial Services Innovation, Chicago is one of America’s leading financial centers. Therefore, when an American ally goes hat in hand to the International Monetary Fund in search of a bridge loan, the people of Chicago take notice.

The government of Pakistan is practically broke and will be approaching the International Monetary Fund to get a loan. Although loans have been promised by the United States, China, and other countries in the next few years, Pakistan cannot wait to see that money. It will run out of cash within 10-15 days. This announcement comes on the same day as an attack on an American aid worker, two days after a suicide attack at a sports stadium, a terrorist hijacking of military supply trucks, and shortly after the latest United States bombing inside this nominal ally in the War on Terrorism.

Pakistan’s pending bankruptcy is of concern to Chicagoans on many fronts. In what is credibly being labeled the bleakest moment in Pakistan’s history, the crisis in this fragile ally is touching the people of Chicago on personal, economic and security levels. There are over 30,000 Pakistani immigrants in the State of Illinois, not to mention many thousands more American citizens of Pakistani descent. These people, with ties back to Pakistan, contribute millions of dollars to the Chicago economy while sending their families financial support. Chicago’s exports to Pakistan in 2007 amounted to $60,114,578, contributing to several hundred jobs for the city’s residents and tax revenues for the state. Instability within Pakistan is leading to lower levels of external trade as the economic situation in the country worsens.

At the same time, the political situation is deteriorating. The government of the country barely controls vast swaths of land on the Afghanistan border and is under assault from terrorists in the urban areas of the country. A nuclear armed Pakistan is the most powerful unstable country in the world, threatening regional stability with its neighbors Afghanistan, India, and Iran. In all of these places, the United States has security interests that will not be well served if Pakistan’s government loses control over its country; a fate made far more likely if the government defaults on its debts.

Chicagoans will be asked to serve in any further American deployment of military personnel to the region, donate food aid offered to help those suffering from strife, and possibly take in refugees from potential political instability that may result. Knowing our way around a financial crisis may help the people of Chicago endure the consequences of such turmoil in Pakistan.