Crypto News: A dystopian warning

Pakistan has touted itself as one of the world's cradles of civilization, flourishing for thousands of years along ancient trade routes passing through the fertile Indus Valley.

Now it presents a dystopian vision of the future, bankrupt, unstable and threatened by climate catastrophe. Its fate offers a warning to other heavily indebted nations on the precipice, from Sri Lanka to Zambia.

Key reading:

Pakistan is due to hold elections no later than October, and political jostling is narrowing the nuclear-armed nation's options.

Opposition leader Imran Khan, who was ousted from the premiership last year, is in a bitter standoff with Prime Minister Shehbaz Sharif over control of the country of 230 million. He's held mass rallies in recent months to pressure the government into an early vote, while the authorities have filed numerous cases against him and issued a warrant for his arrest.

As Islamabad fiddles, the country is burning up its foreign reserves, and investors see a growing risk of default. The government is living hand to mouth, reliant on outside loans from China while negotiating with the International Monetary Fund for the remaining funds in a $6.5 billion bailout — its 13th since the late 1980s.

Pakistan already got a taste of economic disaster last year when deadly floods displaced millions. Such calamities are unlikely to be a one-off, with climate scientists forecasting massive increases in river flows as a result of melting Himalayan glaciers, inundating farmland and obliterating infrastructure — interspersed with drought.

Pakistan could hardly have a more strategic location, lodged between Iran and India and with China and Afghanistan to the north. That, plus its sheer size as the world's fifth-most populous nation, make it too big to be allowed to fail.

The question is who, both in and outside the country, is going to come to its rescue. — Alan Crawford

Children sit by a fire on a commercial street in Lahore, Pakistan, on Jan. 23. Photographer: Betsy Joles/Bloomberg

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