Pakistan, Oct. 30 -- In 1958, Pakistan paid Oman three million pounds for a small fishing town called Gwadar. For two centuries it had been an Omani possession. Sixty-eight years later, both sides of that old transaction are being tested by the same war, and the results should trouble anyone in Islamabad who thinks seriously about the country's economic future.

Last week the International Monetary Fund published its regional outlook for the Middle East. The numbers are brutal. The six Gulf Cooperation Council economies are expected to shrink by 4.8 per cent this year. Kuwait's economy is forecast to contract by 16.7 per cent, Qatar's by 15.6 per cent, and Bahrain's by 11.3 per cent. These are not slowdowns. They are the kind of collapses...