George Hahn

It's a pawn shop selling grandma's fillings.

Pakistan's equity markets are down 21% year-to-date, while its dollar bonds are down 5% since the start of the war.

Exacerbating the problem, long-running border tensions with Afghanistan erupted into war last month.

As one analyst told Bloomberg, Pakistan is experiencing the double shock of a military and an oil price surge.

According to Pakistan's army chief, the border war could end just as soon as the Taliban ceases to support militants.

Good luck with that.

None of this is new for Pakistan, however.

The IMF is less a lender of last resort to the country than a permanent fixture of its financial architecture, having provided 24 bailouts since 1958.

The 25th check may already be in the mail.

Sri Lanka is the ghost of Christmas future.

It already completed the full cycle, dollar debt, energy dependence, currency collapse, IMF bailout, political implosion, and is being asked to absorb another generational shock before it's recovered from the last one.

the island nation is also recovering from a 2025 cyclone that caused $3.5 billion in damage.

On the positive side, Sri Lanka has 1% to 2% inflation and is predicted to see GDP grow by 5% this year.

Central Bank Governor Nandalal Wirasinghe told Bloomberg Sri Lanka is in a good position to absorb price shocks from the Middle East war, assuming the conflict ends in five or six weeks.

In the meantime, the country is rationing fuel.

Then there's Bangladesh, which imports 95% of its energy.

The government lifted fuel restrictions after nine days of rationing, not because the situation had improved, but to celebrate the end of Ramadan.

That doesn't make economic sense, as Bangladesh risks blackouts and the collapse of its garment industry, the source of 85% of its exports.

But in a country fresh off a 2024 student-led revolution that leveraged outrage over a previous financial crisis, the political options are a choice between awful and worse.

It can use the military to guard fuel depots or placate the population and hope the crisis in Iran ends before the summer heat spikes energy demand.