Economics

Pakistan Debt Crisis of 1998: Fueled by Nuclear Power and Political Instability

Economics, Public Policy

On May 28, 1998, Amidst a turbulent domestic political environment and against the international community’s advice, Pakistan responded to five nuclear arm tests conducted by India with nuclear arms tests of its own – this exacerbated Pakistan’s already precarious situation and pushed it over the edge into crisis mode. As suggested in the Middle East Economic Digest, “Pakistan has put national pride ahead of economic prudence by testing its nuclear devices.”