With an all-out war in West Asia, Pakistan now faces a three-front problem - an increasingly autonomous Taliban to the west, a less forgiving India to the east, and a stretched economic spectrum.
The fivefold increase in the KSE-100 index since mid-2023, corrected a sharp 10% this month, serving an early warning of how swiftly elite confidence can diminish in Pakistan. Its two-front security nightmare is no longer hypothetical but unfolding in real time. The third front - access to IMF tranches, dollar liquidity, and global capital flows, has become as crucial as fighter aircraft in shaping Rawalpindi’s room for manoeuvre.
The Army’s attempt to juggle rival patrons such as the US, China and Russia may not end well. The oil and trade impact of the active conflict in its neighbourhood, Washington’s control over the IMF and dollar liquidity, Beijing’s CPEC lending, and Moscow’s emerging role in energy and transit mean Pakistan’s security threats will be managed less by drones and more by deals, dollars and debt.
Among the various factors contributing to its difficult situation, the primary structural cause was Pakistan’s grudging capitulation to the financial action task force (FATF)’s grey-listing (2018 to 2022) and the threat of blacklisting and financial quarantine. Nominated by the US, UK, France, and Germany, Islamabad was effectively instructed to hand over the Taliban for a seamless Western withdrawal from Afghanistan.
Simultaneously, this demonstrated vulnerability of its Army to coordinated external pressure, a lesson not lost on jihadist groups. With existing IMF conditions, a weak rupee and large external debt, Pakistan remains particularly vulnerable to sanctions, FATF-style pressure, dollar liquidity and debt rollovers, giving the US more economic than military influence over its access to multilateral and private capital.
The second factor flowed directly from that grey listing, forcing Pakistan to arrest, charge, and convict more than twenty terrorist commanders, including Hafiz Saeed and Masood Azhar, who had long been India-facing protégés of the State. Further, over a thousand properties linked to Lashkar-e-Toiba, Jaish-e-Mohammed, Falah-e-Insaniyat, and Jamaat-ud-Dawa were seized. This self-inflicted pain considerably weakened its cross-border terrorist infrastructure, a core element of its aggressive-defensive strategy on the eastern front, which leaves it vulnerable to renewed FATF scrutiny.
Thirdly, India’s patient outreach to the Taliban links Pakistan’s two fronts in ways that would deeply unsettle the generals. For decades, its hard power was optimised for the eastern theatre, with the west treated as a manageable depth zone. India’s recent engagements with Kabul through repeated high-level contacts are gradually re-establishing its soft power with a historically favourable population. The overall effect constrains Islamabad’s room for manoeuvre on its west.
Fourth is the erosion of Pakistan’s leverage over the Afghan Taliban since August 2021. Islamabad had long assumed that sheltering Taliban leaders and brokering their diplomacy with Western capitals would translate into decisive influence once they ruled Kabul. The triumphant images of the ISI chief landing in Kabul a day after the takeover masked the resentment caused by years of step-brotherly treatment and the second-class status of roughly five million Afghan Pashtun migrants on Pakistani soil. As refugees are forced back and fractures surface between Kandahar and Kabul factions, ungoverned spaces have re emerged in eastern Afghanistan, constraining Pakistan’s ability to dictate terms.
Fifth, the human, political, and financial costs in Pakistan’s western provinces are escalating. Casualties among security forces in resource-rich Khyber Pakhtunkhwa and Balochistan are growing, prompting the Army to revert to its undemocratic tendencies by deploying area weapons and air power against its own people. This pattern intensifies longstanding grievances and renews irredentist thinking of a unified Pashtunistan as the dominant province of a reimagined Afghanistan, which would be highly destabilising for Pakistan and inhibiting for potential investments from US, China or Russia.
The sixth element increasing Pakistan’s risk is the recent US-India tariff announcements and the prospect of a broader trade deal, which have undermined a commercially driven US-Pakistan partnership in crypto and critical minerals. Further, with US tariffs stabilised at 10 or 15 per cent, depending on where the legal uncertainties ultimately settle, the narrow competitive advantage that some Pakistani exports enjoyed with competing nations in the American market has vanished. The old belief that Washington would favour Pakistan, or even mediate another India-Pakistan crisis, appears increasingly fragile.
Set against these six risk multipliers are two apparent sources of reassurance, one of which, ironically, is the US. Unlike in earlier Afghan crises, the US has supported Pakistan’s “right to defend itself”, in contrast to president Donald Trump’s November 2025 promise to ‘solve’ the ‘Af Pak dispute’ swiftly. This move could also be strategic - to keep Pakistan outside the Iran-Israel-US confrontation, given its open support to Iran in the 12-day war.
The second, newer source of comfort is Russia. Islamabad has shown no visible solidarity with Ukraine, using it to build political capital with Moscow. Sharif’s early March 2026 visit to Russia remains on schedule despite the air campaign in Afghanistan. Preliminary discussions on a Russia backed transit corridor and oil metals deals could provide Moscow levers over Pakistan’s fuel security and trade routes, potentially turning limited investment into significant political influence.
Taken together, these somewhat mitigated risks create heightened uncertainty for a heavily indebted, politically fraught state. Multilateral lenders and private markets will inevitably reassess Pakistan’s strategic risk as its eastern frontier becomes more unforgiving of miscalculation, its western border descends into an arena of escalating militant attacks, and its warming relations with Russia attract scrutiny. A larger defence budget, diminishing capacity to service IMF, Chinese, UAE, or Saudi obligations, Chinese concerns over the safety of its CPEC investments, and persistent Israeli antagonism regarding Pakistan’s nuclear assets - all compound the sense of vulnerability.
(Mr Safi Ahsan Rizvi is a retired 1989-batch IPS officer with over three decades of experience in national security, counter-terror financing, and geo-strategy, including nearly 18 years at the Ministry of Home Affairs and a UN peacekeeping posting in Kosovo. Most recently, he advised the National Disaster Management Authority (NDMA) on disaster risk reduction and risk finance until January 2026.)
