Pakistan's foreign policy has been no less enigmatic over the years. As various commentators have pointed out, it makes more sense for Pakistan to have cordial relations with India than otherwise. The powers that be in Islamabad evidently don't share the sentiment.

In February, even as the prime ministers of both nations were meeting in Lahore, the Pakistan Army was putting in an order for 50,000 pairs of snowshoes with an Austrian firm. It is reasonable to assume that the planning of the Kargil invasion began at least as far back as that. I don't pretend to know what impulses drove the generals in Islamabad to plan the invasion, but their immediate objectives were fairly clear.

First, isolate Ladakh. Second, internationalise the Kashmir issue. Third, boot the Shias and Buddhists out of thearea and use the region as a forward base for future operations. But the Pakistan Army is no closer to achieving any of those three than it was before the invasion began. So what happens next?

In two words: nuclear blackmail. Not against India, but against the United States. I am not sure if Pakistan has what could be described as a coherent nuclear policy in the first place but, such as it is, it sees nuclear weapons as diplomatic rather than military arms. And in Islamabad's eyes they are weapons to which the United States has no answer.

Think about it: Pakistan has done everything to qualify as a rogue state. It has violated an international border, the Line of Control as laid down in minute detail after the Simla Agreement almost 30 years ago. It trains, arms, and shelters terrorists. It finances their operations through profits from the drugs trade. If, say, Libya had done any of these -- leave alone all -- the West would have jumped to declare it a rogue state. Even if there was no bombing ofIslamabad, as there was of Tripoli, economic sanctions would have been the least that one would expect.

And make no mistake about it, such a blockade would have been highly effective. There are conflicting accounts of just how much hard cash is left in the Pakistani treasury, from $400 million to about two billion.

(India, by the way, has over $30billion, with $4 billion coming in in the last 12 months.) Whatever the precise amount, Pakistan is in no position to wage a war. To put it bluntly, it is on the verge of bankruptcy.

By the time you read this, a team from the international lending agencies should be in Islamabad to see if Pakistan deserves another handout. The signs are not encouraging. Despite all the promises made in Pakistan's budget last year, the tax revenue target for 1998-99 has been missed by Pakistani Rs 54 billion. The expenditure on the running of the government and development programme will be met from domestic and external borrowing.

Yet the Pakistani Finance Minister continuesto build castles in the air. Tax revenues are estimated at Pak Rs 356 billion, two billion more than last year. Non-tax revenues from property, enterprises, and various other transactions are estimated at Pak Rs 141.67 billion against the previous year's revised estimate of Pak Rs 120.6 billion.

Can any levelheaded officer of the IMF or the World Bank accept these statistics? Pakistan is a heartbeat away from being declared a defaulter nation. It could be as early as next week when the lending agencies shall make their report, but other factors will probably delay the date.

Pakistan has already been given a long rope. A $3.4 billion loan has been rescheduled to the end of the year 2000. But how much longer can such generosity continue? Longer, I believe, than optimists in New Delhi hope.

And the reason lies in the simple fact that Pakistan has nuclear weapons.An American friend told me that the second most scary nightmare he had was of nuclear weapons falling into the hands of Islamic fundamentalists.(The most scary, by the way, was of a rogue unit from the old Soviet Army.) That nightmare could be closer than he thought; if Pakistan is pushed to the wall, it could threaten to use its nuclear weapons -- not to bomb India, but for hard cash. Can you imagine those weapons in the hands of, say, the Taliban or Osama bin Laden?

Some might suggest this is improbable. I think not. While the media's focus is on the telephonic conversations between President Clinton and Prime Minister Nawaz Sharif, another communication has been ignored. I refer to a letter written by Pakistani Foreign Minister Sartaj Aziz to his US counterpart Madeleine Albright. The tone makes it amply clear that the US stance on Kargil is not appreciated in Islamabad. The spectre of a nuclear weapons auction is not so very farfetched.

This leaves the United States with two options: it can call Pakistan's bluff and totally squeeze that nation, or it can knuckle under the pressure and hand out more cash. This, potentially, is the greatestchallenge to the West since the end of the Cold War, perhaps even greater than the Gulf War.

The interests of the Pakistani Army and the Pakistani Prime Minister do not necessarily coincide. The generals are yet to forgive Nawaz Sharif for the way he squeezed Jahangir Karamat out of office and then appointed Parwez Musharraf as Chief of Staff. But they are united, for various reasons, in their not-so-delicate attempt at blackmail -- "We are all that stand between the Taliban and the Bomb. Choose wisely."

If pressed too far, the present Pakistani leadership will sell nuclear weapons to the highest bidder. If it does the honorable thing, the country will fall into chaos and the Taliban will end up with the arms anyway. In other words, "Heads you lose, tails you lose!".

I believe the United States won't risk nuclear weapons falling into bin-Laden's hands. Every major nation knows Pakistan is in the wrong over Kargil, hence the silence even from its traditional allies. But the nuclear blackmail means thatthey are scared to allow Pakistan to flounder altogether. Bankruptcy, I am afraid, will not grind the invasion of Kargil to a halt.