Pakistan's Capital Crisis: Implications for U.S. Policy [November 7, 2008]   [open pdf - 132KB]

This CRS report assesses how Pakistan's capital crisis directly affects U.S. security interests. "Pakistan -- a key U.S. ally in global efforts to combat Islamist militancy -- is in urgent need of an estimated $4 billion in capital to avoid defaulting on its sovereign debt. The elected government of President Asif Ali Zardari and Prime Minister Yousaf Raza Gillani is seeking short-term financial assistance from a number of sources, including the International Monetary Fund (IMF), China, and an informal group of nations (including the United States) known as the 'Friends of Pakistan.' The Pakistani government reportedly has reservations about conditions on the assistance, expressing concerns that the conditions may create political and economic problems. The current crisis has placed some strain on U.S.-Pakistan relations. […] A stable, democratic, prosperous Pakistan is considered vital to U.S. interests. U.S. concerns regarding Pakistan include regional and global terrorism; Afghanistan's stability; democratization and human rights protection; the ongoing Kashmir problem and Pakistan-India tensions; and economic development in the region. Progress in this latter area has been severely threatened in 2008 by a sharp decline in Pakistan's economic stability, culminating in an immediate need for capital assistance. U.S. officials and independent analysts are increasingly concerned that a failing Pakistani economy could undermine multilateral efforts to stabilize South Asia and curtail the incidence of Islamist radicalism."

Report Number:
CRS Report for Congress, RS22983
Public Domain
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