New Delhi, September 7, 2026 (Yes Punjab News)
Pakistan’s successful $3 billion dual-tranche Eurobond issue may signal renewed access to international capital markets, but the high interest rates demanded by investors underline the significant risks that continue to surround the country’s economy and political stability.
The bond issue, the largest single international capital-market transaction in Pakistan’s history, has been presented by the government as another sign of confidence in its economic recovery.
However, Pakistan will pay 7.5 per cent on the five-and-a-half-year tranche and 7.9 per cent on the 10-year bonds, highlighting the risk premium investors continue to attach to lending to the country, according to an article in The Times of Israel.
The article by Italian geopolitical expert Sergio Restelli said international investors were willing to lend to Pakistan again, but at borrowing costs that reflected the considerable risks facing the country.
Beyond Islamabad’s improving international financial profile, the article pointed to growing internal pressures across Pakistan’s provinces.
Balochistan continues to face insurgency and repression, including tensions surrounding CPEC and Gwadar, while Pakistan-occupied Kashmir has witnessed deadly unrest. Khyber Pakhtunkhwa remains under significant security pressure.
In Sindh, disputes over water, resources and provincial autonomy have become increasingly contentious, with the question of the province’s territorial integrity now adding another layer to the tensions.
These divisions were evident in the Sindh Assembly last week, where legislators spent four days debating proposals for new provinces and administrative units.
The ruling Pakistan Peoples Party opposed any division of Sindh. Opposition legislators from MQM-P, PTI and Jamaat-e-Islami backed greater administrative decentralisation and accused the PPP government of using fears over the province’s division to divert attention from corruption, poor governance and inadequate devolution, the article said.
At the heart of the dispute, according to the article, lies a longstanding question over control of Sindh’s water, land and resources, as well as the influence exercised by Islamabad and the Punjab-dominated political and security establishment over the provinces.
Water has emerged as one of the most sensitive issues. Sindh, located downstream on the Indus river system, has for years alleged that Punjab consumes a disproportionate share of its waters.
The proposed construction of six canals linked to agricultural development in Cholistan intensified these grievances and helped trigger a mass political movement in 2025.
The opposition brought together groups that do not traditionally share the same political platform, including the PPP, Sindhi nationalists, lawyers, farmers and civil society organisations.
The Sindh Assembly unanimously rejected the canal project, while the dispute also reached Pakistan’s National Assembly and Senate, the article noted.
The continuing political, security and resource-related tensions add to the risks confronting Pakistan as it seeks to rebuild investor confidence and maintain access to international financing.
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