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Monday, June 17, 2024

The fate of Pakistan’s Geo-economic strategy

Pakistan’s geo-economic strategy is doomed to fail if it cannot build a solid foundation. China attained consistent double-digit growth over multiple decades before it embarked on its geo-economic agenda. Other main practitioners possess vast reserves of energy resources and have the ability to disrupt international commodity markets.

For the last year or so, Pakistani leaders have been promoting the idea of geo-economics and have also adopted it as a new basis for their foreign policy. Pakistani Foreign Minister and the National Security Advisor have repeatedly asserted that Pakistan wishes to shift from geopolitics towards geo-economics. The vision behind their strategy is that Pakistan should leverage its geographical potential and engage constructively with neighboring countries to spur economic development in the region and generate greater economic interdependence which would ultimately lead to peaceful coexistence.

This approach looks quite straightforward; however, geo-economics in itself is a complex tool and requires its practitioners to have considerable economic strength. The tools to exercise geo-economics are not just limited to trade and investment policy on which Islamabad is mainly relying. International aid, debt, energy resources and sanctions are also critical factors of geo-economics. It can be argued that geo-economics is not a standalone approach rather it is a multidimensional strategy that incorporates the interplay of international politics and economics.

Read more: From Geopolitics to Geo-economics: A policy shift from the policy makers of Pakistan

Why it is important to pay attention to geo-economics tools?

The right application of geo-economic tools has been essential for world powers in the post-Cold War era in which economic capabilities have gained more importance and have also reduced the significance of military power in the international arena to a certain extent. Unsurprisingly, the country which experienced the most sensational economic growth since the 80s is now widely considered as the leading practitioner of geo-economic strategy.

China uses its economic leverage to back its political interests, secure resources and undermine its rival countries. In their book, War by Other Means, Blackwill and Harris have explained how Beijing’s economic statecraft has helped it in emerging as a global power while the excessive reliance on military power by the US has also helped China in closing the gap between the two.

That said, the significance of military capabilities is still vital and a key determinant of power in international relations. According to Edward HallettCarr, economic power serves as the basis of creating military power. A stronger economy will have greater resources to strengthen its military. Against this backdrop, Pakistan’s geo-economic push will not be perceived as a strategy to bolster peace in the region.

In many cases, geoeconomic tools have been applied by major powers as a coercion tool which further illustrates that this approach will not be suitable for Pakistan in strengthening its narrative. Pakistan itself has been on the receiving end of geoeconomic strategies which have hampered its economic and military development. On the other hand, it does not possess the means and resources to initiate a comprehensive geo-economic strategy.

In recent times, Pakistan has been under pressure to defend Chinese investment in the country since the inception of CPEC. The opponents of CPEC are very likely to counter any geo-economic gains made by Pakistan in the future as well. Unfortunately, the countries Pakistan will be up against are much stronger economically and will find sabotaging Pakistan’s efforts not very challenging.

Read more: Pakistan’s new ‘Geoeconomics’ lawfare

Geoeconomics is the way forward in international politics 

In the initial stages, it has to bolster its diplomatic and security efforts to create an enabling environment in the region. At the same time, it must ensure that the country’s true economic potential is unlocked. CPEC is the most likely gateway for Pakistan to reach its potential but that is also subject to geo-economic challenges.

The US will continue to exert pressure on Pakistan and tighten its regulatory measures if Pakistan continues to rely on Chinese investment. That will leave Pakistan in a tough spot as any disruption to Chinese projects in the country would hamper Pakistan’s connectivity with its neighborhood. Without that, Pakistan would be unable to expand its geo-economic strategy.

Keeping that in mind, Pakistan’s geo-economic strategy is doomed to fail if it cannot build a solid foundation. China attained consistent double-digit growth over multiple decades before it embarked on its geo-economic agenda. Other main practitioners possess vast reserves of energy resources and have the ability to disrupt international commodity markets. Therefore, for Pakistan, the only option is to strengthen its economic base and improve its fiscal health to eliminate the penetration of foreign geo-economic tools.

Read more: Geopolitics and geo-economics of belt and road

Only a strong economy can pursue an effective geo-economic strategy and in order to sustain positive engagement with other countries, the country must be able to act independently in the international arena. In such an ideal situation, Pakistan’s economic independence will be a catalyst for economic interdependence in the region and beyond.

 

Ali Haider Saleem has worked with the Institute of Strategic Studies Islamabad (ISSI) and National Defense University (NDU). His research interests lie in sustainable development, regional integration, and security cooperation. He has studied public policy at Queen Mary University of London and economics at NUST, Islamabad. The views expressed in the article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.