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Pakistan’s geostrategic environment and its impact on the economy

geostrategic
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Saad Nisar |

The geostrategic position of a country plays a very important role in determining the domestic and foreign affairs of a country. It has a great impact on the economy of a country. It determines whether the foreign investment is to be invited or not. Stability in geostrategic environment leads to greater cooperation among the foreign actors which enhances the economic growth.

After the end of the Cold War, the economic globalization entrenched itself deeper into the region where Pakistan is located. Pakistan’s regional policies shaped themselves on new economic lines. This allowed Pakistan to get benefits from economic synergies and the collaboration among foreign actors increased.

Pakistan is facing a lot of challenges but these are equalized by vast opportunities and the government continues to count on consensus approach, backed by the support from across the political spectrum and civil society.

China-Pakistan Economic Corridor as a result came because of changing political and economic spectrums of the region and due to this, the cooperation between Pakistan and China increased. CPEC is a crucial and mutually beneficial venture for both states. It will be a win-win situation for both states which will take the strategic and economic partnership to new heights. CPEC will help China to counter U.S influence in Asia. It will lead to the development of trade routes between Xinjiang and Gawadar Port.

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As a result of this trade route, new business opportunities will build up for the locals leading to economic growth. Additional benefits of CPEC include enhanced security cooperation, promotion of people to people contact and involves the regional and extra regional actors cooperation i.e. Central Asian Republics.

According to the report, the CPEC-related projects will create some 700,000 direct jobs during the period 2015–2030 and raise its GDP growth rate to 7.5 percent, adding 2.5 percentage points to the country’s current GDP growth rate of 5 percent. If all projects go well it will add up energy and infrastructure to the country. According to China Daily, these projects would provide up to 16,400 MW of energy altogether.

Pakistan is keen to realize the great importance of its location and take full advantage of its position in the international economic and political sphere thus elevating its image in the region.

Pakistan’s geostrategic position makes it a golden bird if properly utilized. Pakistan is not only benefiting from China but also from Afghanistan, India, Iran and Central Asian republics. The government of Pakistan had been trying to create a peaceful neighborhood so that the main national objective of economic development could be pursued. Building a peaceful neighborhood is the core aim of Pakistan’s government.

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Pakistan also supports China’s interest in Afghanistan in the economic realm, as a result of which Pakistan and Iran got engaged on the issues related to Afghanistan. Pakistan-Iran enhanced their cooperation regarding the developments in Afghanistan; stable Afghanistan would lead to stable economic conditions in both Pakistan and Iran.

Regional cooperation and active engagement of regional players can lead to obtaining of economic goals. Pakistan also has the potential to play a role as a conduit between energy rich Central Asia and energy scarce South Asia. Access to energy is of vital importance and it has been shaping the geopolitical environment and relations among the major powers and regional states.

Pakistan’s relation with the Russian Federation are growing steadily. The two countries are cooperating closely at the UN and SCO. Both share a common interest in promoting peace in Central Asia.

The regional scenario would provide more space to China-Russian dominance in Asian pipeline system and its distribution. Pakistan can become an energy trade corridor for the oil and gas pipeline from Iran, Turkmenistan and Qatar. IPI gas pipeline and TAPI to be materialized should not become a victim of foreign intervention and sanctions. Similarly according to the opinion regarding U.S trade-aid balance, the two-way total goods trade was $5.3 billion in post-2014 era.

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U.S imports from Pakistan was $3.7 billion dollar in post-2014 era, 1.6 percent increase from 2012 and 46 percent increase from 2003, the U.S exports to Pakistan amounted to $1.6 billion, 7.7 percent from 2012 and 95 percent increase from 2003. South Asia persistently remains one of the least integrated regions of the world and India would do well to provide Pakistan access to Bangladesh, Nepal and Bhutan for trade, while Pakistan can be a conduit to India to establish links with Central Asia through Afghanistan.

Regional cooperation and active engagement of regional players can lead to obtaining of economic goals. Pakistan also has the potential to play a role as a conduit between energy rich Central Asia and energy scarce South Asia.

Similarly EU also has great importance in trading with Pakistan. In post-2014 time period the trade between EU and Pakistan was $8.2 billion. The European Commission articulated the exports from Pakistan would increase by 574 million dollars per year. EU financially supports Pakistan in economic reforms and let improve infrastructure and governance capabilities in Pakistan.

Pakistan’s relation with the Russian Federation are growing steadily. The two countries are cooperating closely at the UN and SCO. Both share a common interest in promoting peace in Central Asia. Pakistan seek Russia’s cooperation in building energy corridors, economic linkages and road and rail networks linking Central Asia with Pakistan.

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Pakistan is keen to realize the great importance of its location and take full advantage of its position in the international economic and political sphere thus elevating its image in the region. Pakistan is using its geostrategic position to focus on economic diplomacy and commercial ties with other regional actors and organizations. In sum, Pakistan is facing a lot of challenges but these are equalized by vast opportunities and the government continues to count on consensus approach, backed by the support from across the political spectrum and civil society.

The author is a scholar of Politics and International Relations at Quaid-e-Azam University, Islamabad. The views expressed in this article are authors own and do not necessarily reflect the editorial policy of Global Village Space.


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