On The Brink

Better sense has prevailed. Pakistan gave up belligerence, returned captured Wing Commander Abhinandan Varthaman and even offered talks. Though neither of those solves the core problem of terrorism emanating from its soil, but a key factor behind Pakistan PM Imran Khan's olive branch to India would be the sorry state of its economy.

And, its inability to sustain a war with India financially. Pakistan's $277 billion economy is less than one-tenth of India's.

Its fiscal deficit is almost 9 per cent of its GDP, national debt over 61 per cent of GDP and forex reserves barely enough to pay for about 10 days of imports. Nobody expects Pakistan to fight a war with India without bloodying itself.

Little wonder then that since the February 14 terror attack in Pulwama and Prime Minister Narendra Modi's public resolve that terrorists will pay a heavy price, the Karachi Stock Exchange has fallen over 3.58 per cent, the BSE Sensex in comparison has fallen only 0.02 per cent.