Pakistan's deepening military involvement in the Yemen war through the Makkah Alliance constitutes a case of 'fiscal and strategic overreach,' according to a new analytical report, raising serious questions about the long-term viability of a deployment championed by Field Marshal Asim Munir. The assessment, published in One World Outlook by analyst Andrew Wilson, argues that Islamabad's external finances are too fragile to sustain an active war footing in the Gulf while simultaneously managing pressures on its eastern front and two domestic insurgencies.

Scale of Pakistan's Yemen Deployment

Pakistan has confirmed its military presence in the region, including jets stationed at King Abdulaziz Air Base from April. According to earlier reports citing Pakistani security and government sources, Islamabad had deployed approximately 8,000 troops, a squadron of roughly 16 aircraft — mostly JF-17s — two drone squadrons, and a Chinese HQ-9 air-defence battery, with Riyadh financing the package and Pakistani crews operating the equipment. Those same sources reportedly indicated the confidential arrangement contemplated a deployment of up to 80,000 troops. Islamabad has not confirmed the specific figures.

Pakistan's Budget Cannot Absorb a War Footing

The analysis points to a fundamental mismatch between Pakistan's stated military ambitions and its fiscal reality. For FY2026–27, the federal government allocated PKR 3 trillion — approximately $10.8 billion — to defence services, representing an 18 percent rise over the original PKR 2.55 trillion allocation and roughly 2.1 percent of projected GDP. That figure accounts for about 16 percent of a total federal outlay of PKR 18.8 trillion.

Military pensions, budgeted separately at PKR 822 billion, sit outside that defence line. Critically, the report notes that debt servicing alone — at approximately PKR 8 trillion — is more than two and a half times the entire defence allocation, leaving almost no fiscal headroom for unplanned wartime expenditure.

IMF Constraints Leave No Room for War Spending

Pakistan is currently operating under an IMF programme that mandates a primary surplus of 2 percent of GDP and continued restraint on development spending. The report underscores that these conditions foreclose any possibility of an ad-hoc war budget. GDP growth for FY26 is estimated at between 3.6 and 3.7 percent, while inflation — following an energy shock — still stood at around 10.3 percent in September. Foreign exchange reserves of roughly $21.5 billion at end-September, while improved from the 2023 trough, represent only a few months of import cover.

Gulf Lifeline Is Now Under Fire

The strategic paradox at the heart of Pakistan's position, the report argues, is that the very source of financial relief is now a conflict zone. Pakistan holds approximately $8 billion in Saudi deposits at the central bank. In July, the State Bank of Pakistan confirmed that Riyadh had rolled over $5 billion of that amount to December 2028, reducing the year's external financing need to $21.5 billion — though that figure itself remains substantial, with cash deposits and commercial loans making up a large share. A further $3 billion deposit was extended in the spring.

As the report notes, 'Gulf cash is what makes the restraint look manageable, and it is the same Gulf now under fire.' While Saudi money can cover stipends and operating costs, it cannot replace a downed aircraft squadron or an air-defence battery on the Indian border — nor can it manufacture the political space to deploy them in Yemen without domestic and geopolitical blowback. This is, as the analysis concludes, 'relief, not independence.'

Strategic Risk Beyond the Balance Sheet

Beyond the fiscal dimension, the report highlights a strategic overextension. Pakistan has historically positioned itself as a diplomatic mediator in the Yemen conflict, a role that active combat participation now directly undermines. The deployment also places additional strain on military formations already committed to the eastern front with India and two ongoing domestic insurgencies — demands that Saudi financing cannot offset. This comes amid a broader period of regional instability in which Pakistan's strategic ambiguity has been one of its few diplomatic assets.

Whether Islamabad recalibrates its Yemen posture or presses ahead will likely depend on the pace of IMF review timelines, Riyadh's continued willingness to roll over deposits, and the trajectory of the war itself.