Pakistan's foreign minister Shah Mehmood Qureshi is meeting Mike Pompeo and John Bolton today, while a deadlock between cash-strapped Islamabad and bullish Washington shows no sign of thaw.
Pakistan's Prime Minister Imran Khan, who rode a populist wave and won national elections in July, desperately needs to boost the country's foreign exchange reserves.
Islamabad faces a ballooning current account deficit, as the money going out of the country exceeds the amount that's coming in. It needs funds to pay for imports and international debt instalments. And to make up for the gap, the country is exploring various avenues.
Floundering economy will be on top of Pakistani Foreign Minister Shah Mehmood Qureshi’s agenda as he meets US Secretary of State Mike Pompeo and National Security Advisor John Bolton in Washington on Tuesday.
Qureshi’s visit comes as Islamabad considers approaching the International Monetary Fund (IMF) for a possible $12 billion loan to avert a financial crisis.
Washington has a substantial say in IMF’s affairs, having a dominant position on the board of governors of the lender of last resort.
While diplomatic relations between the two sides have hit rock bottom, expert say, they can still find ways to cooperate -- provided they over come differences, which have festered into distrust.
It’s about the economy
“There’s no doubt we need an IMF loan at the moment,” says Saad Bin Ahmed, Head of Brokering at Karachi-based Arif Habib Securities.
“We can end with a current account deficit of between $14 billion to $15 billion by the end of fiscal year (next June),” he told TRT World.
For Pakistan, which in 2017 had exports of a paltry $23 billion against $53 billion of imports, the amount is substantial.
Even though the new government of Khan has tried to cut back on imports by raising taxes on products such as expensive cellphones, the steps won’t help in the short term.
Washington has added to Pakistan’s foreign exchange problem by cutting back military aid of around $900 million.
But Michael Kugelman, a senior associate in the South Asia programme of the Wilson Center, says it’s unlikely Washington will take the route of IMF to influence Pakistan on the pressing issue of Afghanistan.
“At the end of the day I am not too sure if the US will try to push too hard in this regard giving its own interest in stability in Pakistan.”
The perils in Afghanistan
In his first tweet of 2018, the US President Donald Trump has lashed out at Pakistan for “lies & deceit” in Afghanistan where the American soldiers have for years struggled to contain the Taliban.
The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!— Donald J. Trump (@realDonaldTrump) January 1, 2018
Kugelman say the two sides could now discuss ways to bring the Taliban to negotiating table and perhaps accelerate the process to find long lasting peace in Afghanistan.
“Good news is that this time around both sides have a similar interest in discussing the reconciliation issue in Afghanistan.”
Senior Taliban leadership continues to find sanctuary in neighbouring Pakistan, which has refused to kick them out, he says.
In their meeting with US officials, the Pakistanis will try to get a sense of Washington’s desire to cooperate with them on Afghanistan, Kugelman says.
“There is a concern in Pakistan that US has agreed to directly speak with the Taliban and that they might leave Pakistan out of the talks. Pakistanis would make sure they are seen as an important player.”
But Naeem Khalid Lodhi, a retired lieutenant general of the Pakistan Army, says that Islamabad’s influence over Taliban has diminished as the militant group is now approaching Russia and Iran to play the role of interlocutor.
In an interview with American broadcaster Fox News ahead of the meeting, Qureshi did not outrightly reject the possibility of releasing Shakil Afridi, who is in a Pakistani jail on charges of treason.
Afridi, a doctor, has helped the US’s Central Intelligence Agency (CIA) in tracking down Osama Bin Ladin in Pakistani city of Abbottabad in 2011 by collecting DNA samples of people in the neighbourhood.
“He is viewed as a traitor in Pakistan. But he is viewed as a friend in the US. So we have to bridge this gap,” he told the news channel.
Pakistani government officials have mostly avoided to comment on the subject. What prompted Qureshi to make the statement remains unclear.
“I can’t seem to understand why he commented on Afridi,” says Zafar Halily, a former Pakistan diplomat. “There should be no talk about his release. It’s our internal matter. Many more Pakistanis are languishing in American jails.”
Washington has pressed Islamabad for his release but his role in spying on Bin Laden, which translated into a US Navy Seals raid on Pakistani soil, was an embarrassing moment for the country's military.
But experts argue that recent developments indicate that Pakistan might have opened itself for a compromise.
A new CPEC?
The US has historically been the largest investor in Pakistan. But as the relations have soured in recent years, Islamabad has started to look elsewhere to finance infrastructure projects.
The China-Pakistan Economic Corridor (CPEC) plan, a $60 billion project, has been described by Pakistani officials as a game changer. China intends to grant heavy loans and invest in Pakistan's power plants, roads and a port.
Washington suspects China of using CPEC to increase its naval presence in the Indian Ocean, says Lodhi.
To placate the US, Pakistan has offered Saudi Arabia to join the CPEC.
“I think we are trying to tell the US that we won’t allow China to use our ports and other facilities for military purposes and that its all for economic purposes,” Lodhi tells TRT World.
“Nothing else explains the sudden desire of Pakistanis to include Riyadh in the project. But it’s going to be a tricky situation.”
Saudi Arabia and the US have strengthened ties since President Donald Trump took office last year. Both countries view Saudi Arabia’s regional rival Iran as a security threat.
The Kashmir issue
Qureshi is likely to bring up the disputed territory of Kashmir in his discussion with the US officials. The Himalayan region is claimed by both India and Pakistan.
“Washington refuses to even talk about the Kashmir issue,” says Lodhi.
Even in Pakistan many military officers and bureaucrats feel that previous governments hadn’t done enough to highlight the Kashmir dispute.
“Americans’ indifference over Kashmir is completely unforgivable, that has scarred our relations,” says Hilaly, the former diplomat.
Also, a growing relationship between India and the US, especially in the field of nuclear cooperation, makes Pakistan jittery.
“The US is supplying India with uranium for civil purposes so New Delhi can use its own domestically produced uranium to make nuclear weapons,” says Hilaly.
While Kashmir might come up during the discussions, it is unlikely the US will agree to engage in resolving with the 70-year-old post-colonial dispute.
“The US attaches a lot of importance to its relationship with India. So they would not want to alienate India considering the current government in New Delhi says that there is nothing to discuss on Kashmir.”