The limits of Pakistan's strategic pivot to geoeconomics

In recent weeks, Pakistan has announced a foreign policy shift from geopolitics to geoeconomics. The fact that strategic competition among global powers undermines world peace and makes diplomacy unpredictable “has made economic diplomacy all the more important", said Foreign Minister Shah Mahmood Qureshi. Geoeconomics implies using geography as leverage to maximise economic well being.

The Pakistani government’s desire to shift its approach is understandable – relying on geoeconomics would help mitigate the costs incurred by rising US-China competition. However, while Islamabad thinks it can maximise its self-interest through geoeconomics, the international system may prevent it from doing so; Pakistan cannot ignore geopolitics.

With Afghanistan, Iran, China and India as neighbours, Pakistan is positioned in a strategic location that comes with its own challenges and opportunities. Decades-long rivals Pakistan and India were on the brink of war as recently as 2019. During the escalation, Pakistan said it shot down two Indian fighter jets. At the time, Pakistani Prime Minister Imran Khan warned that a conflict between two nuclear powers was not possible, and, as he projected, the deterrence power of nuclear weapons prevented an escalation into war.

With the increasing rivalry between the US and China, geopolitics might rekindle tensions between the two countries; Pakistani-Indian tensions could become another battleground. Geoeconomics is limited in its ability to end these tensions.

US-China rivalry

From the American perspective, India is an important potential ally to balance China. India has the second-largest population in the world, its economy is growing rapidly, and its position allows Washington to expand its containment strategy to the Indo-Pacific. 

American representatives have argued for years that India will have to decide and take sides, and have projected that India will side with the US. While India may try to avoid that decisionmaking, systemic realities will push India to do so. Just as Australia was forced by the international system to join AUKUS, India, too, will side with the US. Bloody border clashes between China and India in 2020 were just a small preview on the powerful force of the international system.

Since American lawmakers see the value of India in the big geopolitical picture, they have suggested waiving India from the CAATSA sanctions after it has bought the S-400 air-defence systems from Russia. Furthermore, with growing American-Indian ties, India will gain better access to weapons systems and will increase its arsenal to balance China.

From the Chinese perspective, Pakistan is of high importance. Without Pakistan, Beijing’s Belt and Road initiative would be almost impossible. Pakistan’s strategic location and its access to the sea are essential for China’s geopolitical ambitions. Chinese investment in Pakistan is estimated to be $65 billion. The value and importance of Chinese investment was likely a major consideration for Prime Minister Khan in his position regarding the Chinese treatment of the Uighur Turkic Muslim minority in China.

The Pakistani people have learned from the past about how the US has abandoned them at critical times, despite Islamabad’s critical role in the post 9/11 period. After the American withdrawal from Afghanistan, the strategic value of Pakistan for the US will decrease even further.

In this context, geoeconomics can help Pakistan to work on regional stability, generate profit, and create mutually beneficial agreements. Yet economics can not - and will not - overshadow the security dilemma Pakistan will face.

Achilles’ heels

The upcoming period for India and Pakistan will force both sides to increase their capacities and address their weaknesses. In this context, India and Pakistan both have their achilles’ heels. For India, the Modi government’s racist policies against the minority Muslim and Christian populations may transform into its biggest weakness. In addition to humanitarian considerations, it is foolish to alienate 213 million people when New Delhi could, instead, benefit from its Muslim population vis-a-vis Pakistan. When the time comes, Indian politicians will regret using violence against Muslims and Christians. 

The Achilles’ heel of Pakistan will be Afghanistan. Pakistan already hosts 1.45 million Afghan refugees. After the US withdrawal and the takeover by Taliban, Afghanistan is at risk of near-universal poverty. It is in Pakistan’s interest to ensure relative stability in the war-turned country and guarantee a minimum of economic activity that would prevent new migration waves. Islamabad also wants to prevent any foreign actors from using Afghan territory to harm Pakistan. In other words, Pakistan has to manage a challenging relationship with the Taliban to convince strongly opinionated figures to be more conclusive and realistic. While doing this, Pakistan also has to try to convince the international community to help the Afghan people and accept the Taliban as a reality.

The geopolitical dynamics in the region promise Pakistan will be confronted with new challenges and new threats. By improving economic activities in the region, Pakistan can build bridges and generate wealth to ease the upcoming burden of the international system on the country. 

For instance, infrastructure investments that link Pakistan to European markets would provide Pakistan with additional opportunities. Islamabad knows this. However, geoeconomics will help Pakistan only in the areas in which geopolitics will allow it.

Regional integration and the collective pursuit of sustainable development in an environment of peace and stability would help Pakistan. For instance if Pakistan manages to build a working and efficient train supply line to Turkey via Iran, it will help the country reach the European market better. Chinese investments in Pakistan as part of the Belt and Road project will increase the value of Pakistan in global trade. Stronger naval transport links with the Gulf states as well Africa can also help Pakistan to multiply its economic relations.

Disclaimer: The viewpoints expressed by the authors do not necessarily reflect the opinions, viewpoints and editorial policies of TRT World.

We welcome all pitches and submissions to TRT World Opinion – please send them via email, to opinion.editorial@trtworld.com