NEARLY three years have passed since the announcement regarding Pakistan’s pivot from geopolitics to geo-economics. So far, this policy shift has proved nothing more than rhetoric.

A country’s geopolitical value signifies its relevance in international relations beyond its own region, especially its capability as an ally or partner in Great Power rivalry. The country has a place in geo-economics if, by virtue of its geopolitical location, infrastructure, or resources, it can play a meaningful role in the global economy — perhaps as a manufacturing base or a link in supply chains. Or it could be a source of energy, or serve as a hub for transit trade or energy flows.

Pakistan is relevant to both geopolitics and geo-economics. But its policy planners should ask themselves if they really have to choose between the two. Or whether such choice is indeed possible. Also, is geopolitics the problem and geo-economics the solution to Pakistan’s economic woes? The truth is, Pakistan did not prioritise its people’s socioeconomic well-being. Its governance model preferred the elite over the people, security over development, dependence over self-reliance, and status quo over progress. The system is now damaging more than the economy. Pakistan may be eligible for geo-economics but is not yet qualified for it.

Geopolitics is only partly to blame. It remains important to Pakistan’s foreign policy, though the extent of its relevance has changed. Situated between South Asia, Central Asia, Iran and the Middle East, and living in the strategic shadow of China and Russia, Pakistan has geopolitical salience, putting it at the crossroads of geopolitical rivalries and ambitions it can take advantage of. But geopolitics can only be an asset if Pakistan is stable. For an unstable country, it is a liability and poses risks. For instance, if a big power loses, its ally loses too, as has happened to Pakistan in America’s wars.

Pakistan must rethink its geopolitics and geo-economics.

Washington’s war aims have always been different from Pakistan’s, and its strategy often flawed. If the pivot to geo-economics means Pakistan would no longer be part of such high-risk geopolitics, this is to be welcomed. America’s wars also incited Pakistan’s own geostrategic ambitions, that brought it as much harm as did US policies. If Pakistan has relinquished this policy, it is a good step.

Geopolitics remains a guiding principle for US-Pakistan ties except that it now provokes conflict in the context of US-China rivalry. Pakistan is seen as advancing China’s geopolitical aims. It will have to rea­ch some understanding with Washing­ton on strategic and security issues, otherwise these will keep colliding with prospects of cooperation with the US, a crucial economic partner, and thus limit Pakistan’s geo-economic role.

Even in the Gulf countries, Pakistan’s traditional friends, economics now beats to the rhythm of geopolitics as these states navigate between the US-Europe-India axis and China’s geopolitical outreach. Geopolitics will figure in Pakistan’s relations with them, too.

Pakistan thus must rethink not only geopolitics but also geo-economics. The fact is, its real value in geo-economics won’t be evident until Afghanistan stabilises, ties with India improve, and it becomes a hub for pipelines and trade with Central Asia. However, given its structural economic weaknesses, poor governance, and lack of political stability, Pakistan’s economy is not quite prepared for geo-economics. The change will not come easily, as there is a clash between elite interests and sound economic policies.

Pakistan’s poor economic policies have been a way to safeguard its elite-led syst­­em. Policies, es­­­­pecially those related to taxes, subsidies, tarif­­­fs, and exports, were designed so as not to lead to the erosion of the social structure that maintains the feudal system, or collide with the financial interests of the business/industrial elite, not to mention the extraordinary allocation of resources to the defence sector. The system must reform.

Pakistan might be able to improve the economy on the margins without systemic changes, and have a higher growth rate. But what good is the growth rate if it makes little difference to poverty, social indicators and human security? A population with poor education and healthcare is hardly productive economically. Martin Raiser, World Bank regional vice president for South Asia, recently spoke of Pakistan’s “poor human development outcomes and increasing poverty”, and underlined the necessity of addr­essing the “acute human capital crisis”.

Pakistan cannot abandon or escape geopolitics. And geo-economics will remain beyond its grasp if it fails to make the necessary reforms. The alternative: Pakistan will be stuck where it is, at best.

The writer, a former ambassador, is adjunct professor Georgetown University and Visiting Senior Research Fellow, National University of Singapore.

Published in Dawn, January 17th, 2024