From geopolitics to geoeconomics: a policy shift on the part of Pakistan’s policymakers

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What is the meaning of the term geo-economics which is often used by academics and policy makers? There is no solidarity on how to explain the term. Definitions include the geostrategic use of economic power, the use of “economic tools to advance geopolitical objectives”, the achievement of foreign policy results through a projection of economic and non-military power, and “the use of economic instruments to promote and defend national interests and produce beneficial geopolitical results. ”. Some see geoeconomics as an art of government that deploys geopolitical power and leverages geography to achieve economic goals.

The current PTI regime and the Pakistani military establishment have decided to put the economy at the top of the country’s foreign policy agenda. The plan depends on peace and stability, development, cooperation and connectivity.

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Why are we witnessing a change in foreign policy?

In bringing about this change in foreign policy, Pakistan’s main asset is its new image as a future leader in Asia. Negotiating for peace and stability in Kabul is the first essential step towards building this sweet image of Pakistan. Pakistan has worked hard to bring the Taliban to the peace table. Pakistan’s position on a ceasefire with India and a moral position on the Israeli settlements confirm it. There is no doubt that Pakistan has become a key regional player at this time. Yet many obstacles stand in the way of its final geo-economic goal.

Of these, the most important remains Pakistan’s local economy. Remittances are increasing each month higher than the last, and exports are also increasing. However, the country lacks sound but dynamic economic policies that combine the forces of supply and demand. By extension, the State must adopt a more attractive profile on a global scale to attract investors and increase the volume of trade. Various studies have shown that there is an inverse relationship between vaporization and foreign direct investment (FDI). The State Bank reaffirmed this fact by claiming that FDI fell by 27% compared to last year in February 2021. This was in part caused by the political instability the country experienced during the peak of the pandemic.

Several organizations believe that Pakistan has been unable to fulfill its obligations to its citizens and the global community around the world. International organizations are deeply concerned about Pakistan’s efforts to eradicate terrorism. Although Pakistan has worked hard and lost over $ 100 and 80,000 people, Pakistan is still receiving. World powers accepted the Indian spread and accused Pakistan of harboring terrorist sanctuaries. Pakistan is on the FATF gray list; although Pakistan has done exceptionally well, there is still a lot of work to do to get Pakistan off the gray list. Various money laundering cases are still pending in Pakistani courts; the courts must play their part to meet the requirements of the FATF. Domestic political instability is the main obstacle to foreign direct investment (FDI).

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What is the way forward for Pakistan?

In terms of geostrategic significance, few states in the world come close to where Pakistan wants it to be. The country has direct access to the warm waters of the Arabian Sea. It is the shortest route to the Indian Ocean for the landlocked countries of Central Asia. Unfortunately, connectivity remains a challenge. The CPEC has faced several delays due to issues related to Covid 19, a failure to set up special economic zones and a lack of consent on tax exemptions for residents. The evaluation of the $ 12 billion programs remains incomplete. The Asian Development Bank also recently said that crossing Pakistan’s borders is an expensive and tiring exercise and, therefore, not beneficial for interconnectivity in the region.

The state of Pakistan wishes to use economic interdependence as a foreign policy tool like its northern neighbor. But first it has to overcome some of its shortcomings. The most effective solution will be to plan to gravitate towards two crucial areas. Internally, the state must ensure that the fundamental rights of citizens are guaranteed and the state’s mandate prohibits any extremist conscience from expanding its network. The need of the hour is to move from conventional security to human security. This will have a direct impact on finances as more and more states will be ready to forge friendly relations with Pakistan, inevitably attracting investment.

Economically, the state needs a hybrid of supply and demand strategies with devaluation of interest rates. Nonetheless, an increase in supply ensures that the market remains competitive and that exports reach global levels. Bilateral trade pacts must take center stage, as multilateral trade organizations like SAARC have mostly disappeared over the years. Finally, reviving Pakistan’s railways is an essential springboard for connecting the country to Tehran and Istanbul for tourism and commercial purposes.

Read more: The IMF cannot dictate its policies to Pakistani institutions, Teresa Daban

Pakistan’s new and revised foreign policy seems like a logical change. Trade is rapidly replacing military methods across the world to achieve national goals. However, foreign policy is a logical extension of domestic and economic policy. If you want to be successful in the first case, it is crucial to correct the second first.

The author is a lecturer in the Department of International Relations at Government College University Faisalabad. The opinions expressed in the article are those of the author and do not necessarily reflect the editorial policy


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