“Every gun that is made, every warship launched, every rocket fired”, Eisenhower in his famous Iron Cross speech warned, “is a theft from those who hunger and are not fed.” History, sadly, has proven him right. The consequences of war are rarely confined to the battlefield. The true cost transmits far beyond it, upsetting markets, households, and the daily lives of those far removed from the frontlines.

The 2026 Iran War is no exception. IMF projections reveal a 0.2–0.3 percentage point reduction in the projected global growth. This roughly amounts to an estimated $200–300 billion loss in global output in 2026 alone. More alarmingly, the UN warns that the conflict could push more than 30 million people back into poverty worldwide. For countries like Pakistan, already grappling with fragile economic recovery and rising poverty, such shocks present profound policy challenges.

The country today stands at a delicate strategic crossroads. On one hand, in an increasingly volatile region, it has played a constructive role in diplomatic efforts and de-escalation. Its own economy, on the other hand, remains exposed to the shocks that global conflict generates. These pressures affect the entire country; however, it is the 29 per cent of the population living below the poverty line that remains most vulnerable.

In recent years, this vulnerability has markedly deepened. Poverty in the country has sharply risen from 21.9 per cent in 2018–19 to 28.9 per cent in 2024–25, with rural and urban poverty climbing to 36.2 and 17.4 respectively. This is not just a statistical increase. It translates into the reversal of fragile economic gains.........

© The Friday Times