Volume 8, No. 8, August 2026
Editor: Rashed Rahman
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Field Marshal Asim Munir is riding high on Pakistan’s mediation of US-Iran talks, but the country remains beset by economic crisis, a rapacious elite, IMF-imposed austerity and violent insurgencies
As Postcolonial Nation-Building vanity projects go, Islamabad is anything but unique. Like Brasilia, Chandigarh, Abuja and Putrajaya, Islamabad was designed to be free of the encumbrances of the past, immune to the destitution of the post-independence present. Nestled in the scenic Margalla Hills, boasting grand modernist architecture, Islamabad was the brainchild of Field Marshal Ayub Khan, Pakistan’s first military dictator, who ruled between 1958 and 1969. This was at the height of the Cold War, when Pakistan enjoyed the good graces of Washington as a crucial bulwark against communism in southwest Asia alongside Kemalist Turkey and the Iran of Reza Shah Pahlavi.
Much water has flowed under the bridge since then, with Pakistan falling in and out of Washington DC’s favour as the geopolitical winds have shifted. Historical contingencies notwithstanding, few could have foreseen that Ayub Khan’s beloved Islamabad would in 2026 become one of the world’s most watched capitals, with Pakistan’s second-ever Field Marshal playing mediator-in-chief in talks between the US and Iran.
The Serena Hotel has always been a gathering place for Pakistan’s rich and powerful – and, indeed, for the rich and powerful from beyond its shores. It was here that the delegations led by the US vice president, J D Vance, and Iran’s foreign minister, Abbas Araghchi, met over two days in April to try and negotiate an end to yet another war thrust upon the Persian Gulf by Washington and Tel Aviv. The Serena’s owner, the renowned global plutocrat Aga Khan V, picked up the tab. The meet ended without an agreement, and for many days afterwards it was rumoured that the two sides would return to thrash out a compromise, but they never did. After more back-and-forth and hostilities, a broad 14-point “Memorandum of Understanding” was signed remotely in June, de-escalating though not fully ending the conflict. Iranian and US delegations convened in Geneva on June 21, 2026 to start working out a more detailed permanent peace deal, with Pakistani mediators in attendance.
While the world’s media was camped in Islamabad in anticipation of a second round of peace talks, Pakistan’s government was diligently waging war on the city’s working-class population. Approximately 500,000 of Islamabad’s 2.5 million people live in shantytowns, or what are known locally as katchi abadis. Days after Pakistan played global peacemaker at the Serena, Islamabad’s city administration launched a violent operation just a few kilometres away to demolish a sprawling informal settlement adjacent to the historic Bari Imam shrine. Police liberally employed tear gas and batons to subdue residents while the bulldozers went to work. Thousands of homes were razed to the ground, and the authorities later charged hundreds of locals under draconian anti-terrorist legislation. The world’s press corps was close enough to catch a whiff of the tear gas, but almost none picked up the story.
A few weeks earlier, approximately 25,000 residents of the nearby katchi abadi of Muslim Colony were violently dispossessed of their homes. The evicted families had been part of the first wave of migrant workers in the 1960s who constructed the government buildings, thoroughfares and palatial mansions that serve Islamabad’s bureaucrats, generals and propertied classes. Six decades later, the city’s elite is keen to eliminate all visible evidence of the blood and toil that undergirds its splendour.
Among the biggest populations facing eviction are oppressed-caste Christians, most of whom earn a meagre living as sanitation workers cleaning the capital’s offices, roads and homes. Islamabad’s largest Christian-majority katchi abadi, home to at least 20,000 people, is being removed to build a highway. The settlement is named after a young girl who was accused of blasphemy in 2011 – an accusation later proven to be false – forcing her family and the larger community to flee their previous neighbourhood and take refuge in what became Rimsha Colony. Now, thousands of working-class Christian families are confronted with another traumatic displacement.
A separate wave of evictions has targeted local villages that existed long before the planned capital was even conceived. These original inhabitants of the area, their heritage and their environs, are now all deemed expendable as Islamabad is transformed into a “world-class city” whose skyline, according to one government minister, will resemble a combination of Manhattan and Shanghai.
Delusions of grandeur aside, development imaginaries in Islamabad, and in the rest of metropolitan Pakistan, start and end with speculative real estate. Decades of International Monetary Fund-imposed austerity and the influx of cheap Chinese imports have laid waste to the country’s small manufacturing base. A rapacious profiteering elite, aided and abetted by civil and military bureaucrats – the ‘establishment’ that really calls the shots in Pakistan – now makes its millions through gated housing schemes, road-building contracts and related commercial construction. Land occupied by slum dwellers or villagers is seen as idle real estate that must be cleared and commodified, no matter the impacts on fragile local communities or ecologies.
There was once a time when Pakistan harboured something resembling a national bourgeoisie committed to import-substitution industrialisation. Like their counterparts in other Third World economies, Pakistani manufacturers benefited from cheap labour as the emergent urban proletariat migrated away from rural hinterlands where the Green Revolution had forced smallholders and landless peasants out of the agrarian sector. Beyond narrow class interests, the state’s fledgling industrial policy ostensibly aimed to redress colonial-era terms of trade vis-a-vis the West. The highpoint of Pakistan’s brief tryst with industrialisation came in the 1960s, with the country’s first capital and financial centre, Karachi, as its hub.
Then the propertied elite had little time for Islamabad, a sleepy backwater with no meaningful prospects of profitable industry. The Ayub Khan regime had to seduce high-ranking bureaucrats and military men to the new capital through the allotment of subsidized plots of land. Six decades on, the ruling class in Islamabad cares for economic sovereignty only in name – the real game in town is the burgeoning real-estate market, and everyone wants a piece of it. The establishment is now as much a broker of land deals as it is an arbiter of political power. And at the forefront of everything is the man who has become Pakistan’s de facto ruler.
To be sure, Field Marshal Asim Munir has more than just Islamabad in his sights. Now basking in the global spotlight for having the ear of both the US and Iran, Munir was, until a few short months ago, presiding over a deeply unpopular regime as it engaged in wanton repression of Pakistan’s most popular politician, the imprisoned former prime minister Imran Khan, and his Pakistan Tehreek-e-Insaf (PTI). By all accounts, the PTI triumphed in the country’s 2024 general election, only to be blatantly denied its mandate as the omnipotent establishment cobbled together a coalition government of pliant politicians headed by the current prime minister, Shehbaz Sharif.
Khan and his supporters built up a head of steam after his government was deposed in 2022, having fallen out of favour with the army’s top brass. They insisted that Washington had engineered regime change because the PTI government, which took office in 2018, wanted to chart an independent foreign policy. Khan is no anti-imperialist but nevertheless feels the pulse of a public all too aware that Munir and Sharif are the latest in a long line of Pakistani compradors seeking Washington’s largesse. Khan’s arrest in 2023 was met with PTI-led protests that culminated in the ransacking of military properties and installations. In November 2024, a PTI march on the capital faced a crackdown that left at least a dozen dead. But the anti-incumbent mood shifted dramatically in May 2025 following a four-day military exchange with Pakistan’s perennial antagonist, India. Pakistan’s air force, powered by Chinese jets, claimed to have shot down half a dozen Indian planes; the wave of celebratory nationalism that followed gave the regime a new lease of life. Now its geopolitical standing is further enhanced in the wake of the diabolical US-Israeli attack on Iran and the resulting war.
Trump regularly calls Munir his “favourite Field Marshal”, accorded Sharif a prominent role during his announcement of a Gaza Peace Board, and has inked shady deals with the Pakistani regime on crypto and critical minerals. Quite aside from Trump’s own eccentricities, this is very much the same old script being played out yet one more time: a relatively obscure, military-dominated government in Islamabad dramatically thrust into the international spotlight because of its utility to the US. The last regime of this ilk, headed by Pervez Musharraf, was showered with more than $30 billion in military aid after 2001 under the banner of the so-called “war on terror” as the US invaded and occupied Afghanistan. By the late 2000s, however, the money had dried up and the junta lurched to its inevitably ignominious end. Musharraf departed the scene in 2008, leaving behind a ballooning debt burden and setting the stage for ever more exacting austerity policies that have pulverised an exceedingly young population.
Things have only gotten more acute in the ensuing two decades. Pakistan’s imperial dependencies are now exacerbated by increasingly regular climate breakdown events. The massive floods of 2022, which left a third of the country under water and impacted more than 30 million, inflicted an official tally of more than $40 billion of long-term damage on an agrarian sector already ravaged by the expropriation of land and other natural resources by state and multinational capital. Insurgencies rage in the country’s long-brutalised peripheries, Balochistan and Khyber Pakhtunkhwah – the former ravaged by decades of state repression and colonial-style resource extraction, the latter overrun by Taliban renegades long patronised by the state’s own security apparatus.
The Baloch insurgency’s growing recruitment of educated youth confirms the social crisis faced by the two-thirds of the country’s 250 million people under the age of 30. Pakistan’s present International Monetary Fund (IMF) deal, coming on the back of a severe economic crisis that brought the country to the very brink of bankruptcy, only reinforces a regime of mass joblessness and elite accumulation. It has stipulated firesale privatisations, the hollowing out of already emaciated public services, and further liberalisation of trade and financial markets. Simultaneously, the IMF is ratcheting up pressure on the Munir-Sharif combine to raise taxes and reduce subsidies to pay back the country’s debts. An already regressive taxation regime has become even more so, with indirect sales levies that disproportionately hurt the working masses constituting the majority of all tax receipts. Meanwhile, other than a small white-collar, lower-middle-class segment, virtually no one pays income tax – not least the richest and most powerful, who move their money around at will, including to offshore havens.
It is thus that the millions of young Pakistanis who join the labour force every year are being pushed to the wall. Some still manage to go abroad to work and send remittances back home, but the vast majority of this youthful, working mass are condemned to precarious and exploitative employment in informal settings – mirroring the conditions in the slums where they live.
A reckoning with such deep structural crises can only be deferred by favourable geopolitical winds for so long. Dispossession is the other side of Pakistan’s neoliberal developmental coin, and, niceties aside, neither Washington nor Beijing nor Islamabad’s Gulf benefactors look like they plan to bestow windfall economic gains on the regime for its recent diplomatic performances. Indeed, Islamabad’s highwire balancing act between the US and Iran has not impressed the UAE, which has cancelled thousands of Pakistani migrant-worker visas and refused to rollover $3.5 billion in loans. (To the regime’s relief, Saudi Arabia stepped in to plug the gap.) Meanwhile, local fuel prices almost doubled earlier this year, before returning to around 15 percent above pre-war levels. As is the case across the postcolonial world, this is just the beginning of an inflationary spiral that will, as ever, devastate those on the lowest rungs of the class ladder.
That Islamabad’s high-profile mediation role and its enhanced geopolitical standing could presage meaningful transformation of Pakistan’s political economy – and, indeed, that of the region and world – is not a hypothesis without merit. We are living through a world-historical moment, punctuated by the terminal decline and reactionary warmaking of the US empire. It is thus that ‘middle powers’ are positioning themselves as an important node of the multipolar order taking shape as Pax Americana burns itself to the ground.
Geopolitical rupture has an economic counterpart. The erosion of dollar hegemony proceeds apace, with Tehran’s shutting of the Strait of Hormuz except to vessels paying toll tax in yuan the most symbolic recent example. China is already the manufacturing workshop of the world, and Beijing is now also front and centre of the global renewable-energy transition – yet more incontrovertible evidence of a hegemonic shift. And China is already Pakistan’s most significant development partner, having pumped more than $40 billion into the country through the China-Pakistan Economic Corridor (CPEC). This footprint is likely to widen, but it is worth bearing in mind that cheap Chinese goods, alongside Beijing’s infrastructural investments, have largely reinforced Pakistan’s existing class and ethno-national faultlines.
In a nutshell, where the transition from a US-centric to Sino-centric hegemonic order culminates is yet to be determined. Quite aside from the destruction that the war machines in Washington and Tel Aviv will continue to inflict in the interregnum, relations between states in the Global South, as well as their respective regional and global positions, are anything but linear or predictable. Take, for example, the complex dynamics within South Asia, home to one-quarter of humanity. Given the deeply adversarial relations between India and Pakistan, as well as the abiding interests in the region of both Washington and Beijing, it is difficult to even speculate about the contours – let alone the potential benefits to the region’s two billion people – of a post-American hegemonic constellation.To be sure, geopolitical rupture tells us little about how things will play out within nation-state boundaries. If the largely extractive and authoritarian postcolonial state is not transformed, what will change for the masses in Asia and Africa for whom decolonisation remains an unfinished project?
The obvious historical analogy is with the new world order that took shape after the end of the Second World War, atop the dying embers of European colonial empires. The conventional story of the Cold War tends to underplay the fact that it was an era of multipolarity, in which the formerly colonised countries of Asia, Africa and Latin America were significant players. Crucially, the Third World project emphasised the dialectic between non-alignment and world-making on the one hand, and the struggle for social transformation within newly independent countries on the other.
This is expressly not the case with the Global South today: the political-economic logics that now dominate in many Asian, African and Latin American countries are anything but socialistic, and violent accumulation and dispossession of working people by state and capital is the norm rather than the exception. The Third World project was, of course, not without its internal contradictions; the neoliberal counter-revolution was as much a reassertion of state and class power within the nation-state as an implosion of the multipolar order at world scale.The emergent multipolar order’s potential to meet the needs of the postcolonial world’s teeming masses hinges on the struggle against oligarchic rule within the nation-state. Pakistan embodies the deep contradictions of the current moment more than most. Its future character and historical role will resemble much of what has come before if Generals, bureaucrats and private profiteers continue to rule the roost, feasting on the sweat and toil of surplus populations who are not even spared the katchi abadis that shelter them.
Courtesy himalmag.com