Making Pakistan’s geo-economic dreams come true


Pakistani Foreign Minister Shah Mehmood Qureshi on Saturday held a virtual conference with select members of the US Congress, in which the minister expressed a desire to forge a mutually beneficial relationship and invited several lawmakers to further discuss the questions in June. The meeting was Pakistan’s most recent effort to make foreign policy a reality change, the one that has been under construction since 2018. Aware of its geopolitical limits, the administration in place hopes to go further with a geo-economic agenda instead. The plan is built on the pillars of peace, development partnerships and connectivity.

In bringing about this change in foreign policy, Pakistan’s main asset is its new image as a potential leader in Asia. To negotiate peace in Afghanistan marked the first essential step towards building that image. Join a cease-fire with India and adopting a principle position on Israeli settlements helped solidify it. The country is undoubtedly emerging as a key player in the region and is now poised to become a Asian tiger, as we imagined several decades ago. Yet many obstacles still stand in the way of its final geo-economic goal.

Of these, the most pressing remains Pakistan’s domestic economy. Remittances increased by 17% the previous year and exports recently hit a ten-year high. However, the country lacks sound but dynamic economic strategies that combine the forces of supply and demand. By extension, the state must forge a more attractive profile abroad to attract investment and trade. Several studies have concluded that there is a correlation between volatility and foreign direct investment (FDI). In February 2021, the State Bank reiterated this fact by claiming that FDI had decreased by 27% compared to the same period last year. This was caused in part by the political polarization the country experienced during the peak of the COVID-19 pandemic.

Internationally, several organizations believe that the country has not been able to meet its obligations to its citizens and the global community. In 2017, the BRICS alliance claimed that several terrorist organizations were working in Pakistan. The country has also been registered with the FATF gray list on charges of terrorist financing and money laundering. To counter this, no less than Eleven the bills were passed by the state legislature. The police also arrested several troublemakers, including Zaki-ur-Rehman Lakhvi, the suspected brains behind the Mumbai terrorist attacks. But just as progress was being made, the EU decided to see again Pakistan’s SPG + status due to its earth-shattering human rights portfolio and highly controversial blasphemy law. The EU is Pakistan’s the biggest export partner, and this latest development is guaranteed to trigger an increase in the current account deficit.

In terms of geostrategic significance, few states in the world come close to the coveted location of Pakistan. The country has direct access to the warm waters of the Arabian Sea and is the shortest way in the Indian Ocean for the landlocked countries of Central Asia. Unfortunately, connectivity remains a challenge. The CPEC faced several delays due to complications from the coronavirus, the inability to establish special economic zones and a lack of consensus on tax exemptions for residents. Projects worth $ 12 billion remain incomplete. The Asian Development Bank also recently concluded that the Pakistan crossing limits is a costly and tedious exercise and therefore not conducive to interconnectivity in the region.

The country wishes to use economic interdependence as a foreign policy tool as its neighbour in the north. But first it has to fill in some of its shortcomings. The most effective solution will be a strategy revolving around two key areas. Domestically, the state must ensure that the fundamental rights of citizens are guaranteed, and the state brief prohibits any extremist sentiment from expanding its network. The need of the hour is a change from traditional security to human security. This will have a direct impact on finances as more countries will be willing to establish friendly relations with Pakistan, inevitably attracting investment.

Economically, the state demands a hybrid supply and demand policies with a reduction in interest rates but an increase in supply to ensure that the market remains competitive and that the quality of exports meets international standards. Bilateral trade pacts must take center stage as multilateral trade organizations such as SAARC have largely become obsolete over the years. Finally, breathing new life into Pakistani railways is an essential springboard for link the country with Iran and Turkey for tourism and commercial purposes.

Pakistan’s new and improved foreign policy seems like a logical change. Trade is fast shifting military methods around the world to achieve national goals. However, foreign policy makes sense extension domestic and economic policy. To be successful in the first, it is important to correct the second first.

The opinions expressed in this article are those of the authors alone and do not necessarily reflect those of Geopoliticalmonitor.com



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