Pakistan is set to become the world’s next ‘zombie’ country after crisis-wracked Lebanon, as a large part of the population and businesses have tired of the shenanigans of a corrupt, self-serving elite and are seeking a permanent exit from the country.
The ongoing episode of distress in parts of the United States banking industry, caused by the rapid rise in interest rates, has renewed focus on “zombie” banks — barely surviving, financially undead institutions that have large unrealised losses sitting on their thinly capitalised balance sheets. The term has previously been used for firms that are financially unviable but have been kept alive by repeated government bailouts, akin to our state-owned enterprises.
Much like zombie banks and firms, can there be “zombie” countries? Countries where state breakdown is advanced, where the economy has collapsed, which cannot service their debts and obligations to foreigners, and which can only meet their essential import needs by handouts and bailouts from increasingly frustrated, and a dwindling pool of, friendly countries?
Which are nominally sovereign and independent, but only on paper? Where a large swathe of the population has tired of the shenanigans of a corrupt, self-serving elite and are seeking a permanent exit from the country? Where businesses and the affluent are actively moving their capital abroad? In other words, a country “hollowed out” in almost every sense by an asset-stripping, rapacious elite involved in internecine conflict?
If Pakistan comes to mind, let us first consider another country with somewhat similar endowments of natural resources and intelligent, hardworking people that has already crossed the line to failed state status: Lebanon.
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One of the first Asian leaders to recognize the global and regional impact of China’s rise, the late Japanese Prime Minister Shinzo Abe laid the foundation for a new Asian order that is now emerging.