Tomorrow, US citizens will vote to choose their next leader, a decision that will shape not only US domestic policies but also impact a turbulent world grappling with wars, conflicts and transformative shifts in artificial intelligence and global information flows.
Will Kamala Harris carry forward the Democratic Party’s commitment to maintaining the US role as a global power despite mounting challenges, or will Donald Trump’s ‘America First’ stance sway voters toward conservative Republican politics? Independent polls show a nation and voter base evenly divided, making the outcome difficult to predict with any certainty.
Pakistan, still grappling with the legacies of its role as a US front-line state in the 1980s, remains sensitive to political shifts in the world’s largest economy and most influential power. Public sentiment towards the US in Pakistan is complex: while anti-Americanism can be politically popular, the US remains a top destination for Pakistani youths pursuing higher education and families seeking residency abroad.
Additionally, American cultural influence is evident through household names like McDonald’s, Pepsi, Coca-Cola, Microsoft, Google, Facebook and YouTube, which have substantial market presence in Pakistan. This blend of political scepticism and cultural affinity underscores the multifaceted nature of Pakistan’s relationship with the US.
Difficult to predict election outcome leads industry experts to hypothesise the potential impact of the new US government on Pakistan’s trade and economy
The US hosts a large Pakistani diaspora, with over 625,000 Pakistani-Americans contributing roughly one-third of Pakistan’s annual remittances. The US is also a key trade partner, underpinned by deep economic ties and the presence of dozens of American companies across diverse sectors in Pakistan.
In FY24, Pakistan’s trade with the US saw notable growth. Pakistan’s exports to the US rose to approximately $8 billion, led by textiles and garments, reflecting a significant boost in export revenues. While comprehensive data on total imports from the period isn’t readily available, imports typically remain lower than exports and include machinery, electronics, and agricultural goods, reinforcing Pakistan’s dependence on American technology and equipment for key industries.
The US government’s stance towards Pakistan, including its immigration policies, has a direct bearing on Pakistan’s security, trade and economy. To gain insights from diplomatic, business and economic experts in Pakistan on how the US election outcomes could impact the country and the world, several were approached.
Diplomats expressed optimism about maintaining a positive trajectory in US-Pakistan relations, regardless of the party in power in the US. However, some voiced concerns about potential interference in Pakistan’s internal affairs under the Trump administration.
Meanwhile, Pakistan’s business class hopes to expand trade and economic partnerships with the US, and economists emphasise that Pakistan’s economic strength will ultimately shape its terms of engagement with international partners, including the US.
Jalil Abbas Jilani, former Pakistani Ambassador to the US, expressed confidence in the continuation of the positive trajectory in the bilateral relations. “I have no doubt that this momentum will be sustained after the forthcoming elections. There is a bipartisan consensus in the US that Pakistan holds strategic importance in South Asia, and fostering a relationship based on mutual respect and shared interests is crucial for both nations,” he stated.
Former foreign secretary Salman Bashir was candid in his assessment, emphasising Pakistan’s commitment to its relationship with the US despite the ongoing challenges it faces. “Since the US withdrawal from Afghanistan, Pakistan has struggled to maintain its relevance with Washington; a key factor is the US proclivity to overlook Pakistan’s internal happenings. This approach might shift if Trump is elected.
“The Pakistani expatriate community largely backs Trump. The Pakistan-US relations will continue to be guided by American priorities, where China figures prominently. The Indo-US strategic partnership requires Pakistan to take steps to mend its relations with India.
“There are also the Afghanistan and Iran factors and the conflicts in Gaza and Lebanon. But primarily, the internal fall out of a Trump victory could be most consequential. With Kamala, relations would remain steady. A low-tempo relationship that could shift only if Pakistan achieves economic consolidation and political stability, enhancing its regional relevance. As for legal immigration, I don’t foresee major changes with Trump in office.”
Abdul Aleem, Secretary General, Overseas Investor’s Chamber of Commerce and Industry (OICCI), also underscored the importance of economic and political stability in strengthening ties with the US.
“A Democratic US administration might continue to support Pakistan’s climate action, regional stability, and multilateral aid, potentially enhancing fiscal stability,” he noted, “In contrast, a Republican leadership could prioritise bilateral trade over development aid, with a stronger focus on transparency and regulatory reforms, an area where OICCI could actively contribute to attract greater FDI.
“Diversifying FDI beyond China and traditional sectors is essential for Pakistan. A US pro-trade policy stance could create new opportunities for diverse investments, particularly if Pakistan aligns with global trends, drawing sustained interest in sectors like technology and clean energy.
“Additionally, US immigration policies will impact the Pakistani diaspora; a Democratic government may be more favourable to skilled workers, which could in turn strengthen remittance flows back to Pakistan.”
Dr Nadeem ul Haque, former Vice Chancellor, Pakistan Institute of Development Economics and Director, Socioeconomic Insights and Analytics, criticised the tendency to blame external factors for Pakistan’s challenges. He argued that many issues are of the country’s own making, highlighting that, “We are a closed economy with limited interaction with the global market,” as evidenced by a low trade-to-GDP ratio of just 30 per cent, one of the lowest in the world.
“No global events impact a closed, highly bureaucratic country. We risk stagnation by remaining in our cocoon, not growing or developing,” he stated, emphasising the need for liberalising trade and implementing reforms.
Published in Dawn, The Business and Finance Weekly, November 4th, 2024
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