Crossroads of Change: Redesigning Alliances for Pakistan’s Strategic Growth

• Pakistan’s strategic geo-position places it at the crossroads of major economies, offering exponential prospects for trade, commerce, and economic gain.
• Redesigning alliances requires a nuanced understanding of regional dynamics and global power shifts, as Pakistan navigates a complex geopolitical landscape.
• To safeguard its national interests and enhance its strategic position on the global stage, Pakistan must reassess and potentially redesign its alliances, focusing on creating interdependencies, solidifying economic partnerships, and bolstering regional connectivity

Pakistan is lucky enough to be in a region that is not only rich in one of the oldest civilizations of the world; the Indus Valley Civilization but also at the crossroads of major economies. With three of the world’s major economies in its immediate neighborhood; China, India, and Iran, and the prospects of Central Asian markets via Afghanistan, along with the Middle East right across the Persian Gulf, and Caspian region via Iran-Turkey, Pakistan has exponential prospects for trade, commerce and economic gain.

Redesigning alliances, though in the context of Pakistan’s strategic geo-position, is a complex and multifaceted task, especially with the geo-politics of the region, it requires a nuanced understanding of regional dynamics and global power shifts, but it certainly has the potential to be a major economic power with a slight serious immediate review. As Pakistan navigates a rapidly changing geopolitical landscape, it must reevaluate its strategic partnerships to ensure its future economic security and prosperity.

The country’s geographical location at the crossroads of South Asia, Central Asia, and the Middle East, if planned well, can make it a critical player in regional politics and a key ally for global powers seeking to navigate these key regions. By examining the historical context of Pakistan’s alliances, as well as the current challenges facing the country, herein we aim to look for potential insights into beneficial strategies for redesigning alliances that can serve the best prospects for Pakistan’s national interests and enhance its strategic position on the global stage.

Since its inception in 1947, Pakistan has navigated a challenging geopolitical landscape due to its arch-rival India, forging alliances with various global powers to secure its national interests has never been an easy task. Initially aligning with the United States in the context of National Security, Pakistan played a pivotal role in the region during the Cold War era. The tumultuous relationship with the U.S., including aid packages and periods of estrangement, has defined Pakistan’s foreign policy in a single polar direction.

Though alliances with China have strengthened over time, which is evident in economic partnerships and infrastructure projects like the China-Pakistan Economic Corridor (CPEC), these still need explicit execution for any substantial benefit for Pakistan. These historical alliances shape Pakistan’s current geostrategic decisions in a rapidly evolving global scenario, posing both challenges and opportunities for the nation’s future securities and development. The interplay between historical alliances and Pakistan’s strategic imperatives underscores the complex dynamics at play in the region.

Though Pakistan’s historical context of alliances is complex and crucial in understanding its strategic positioning, however, navigating a complex web of alliances and rivalries requires adept diplomacy and strategic foresight on Pakistan’s part to harness its geostrategic position effectively for national development and security. The evolving dynamics of existing relationships, coupled with regional tensions and security challenges, underscore the need for Pakistan to reassess and potentially redesign its alliances to better serve its national interests. The country’s location at the crossroads of South and Central Asia further complicates its strategic calculus, requiring a delicate balance between various competing interests.
Moving forward, Pakistan must carefully evaluate the benefits and drawbacks of its partnerships while also considering potential alternative alliances to safeguard and advance its geo-economic interests in a rapidly changing global landscape.

Overall, the strategic repositioning of Pakistan’s alliances holds significant implications for its future trajectory on the world stage, though the full-scale potential gains have still not been explored to their full potential, it need re-evaluation. Until Pakistan exerts its sovereignty in matters of strategic decisions with its national interest as primary, Pakistan will remain dependent economically and politically on foreign interventions. The Iran-Pakistan pipeline, the CPEC projects, the RCD trade potential, the Golden Ring Economic Block, Middle East trade, Turkmenistan-Uzbekistan-Tajikistan-Afghanistan-Pakistan Power Interconnection Project (TUTAP-500), etc, all need to be actively persuaded for maximum potential. The ancient trade routes of the Middle East and Central Asia need to be re-calibrated.

Pakistan’s geoeconomic approach should be focused on creating interdependencies, solidifying economic partnerships, and bolstering regional connectivity. Connectivity could potentially offer a multiplier effect in terms of economic and strategic gains. South Asia’s cooperative economic potential has been stymied by geopolitical exigencies. Connectivity initiatives have been seen through a competitive prism. Pakistan’s efforts to expand its economic footprints in the Central Asian Regions (CARs) have been marred not only by rising instability in Afghanistan but by Afghanistan’s traditional insistence that Pakistan allow Indian goods overland access to Afghanistan.

Traditionally, India has systemically excluded Pakistan from its connectivity web. Contentious geopolitics in the region has forced state actors to subvert connectivity initiatives that could favor adversaries. In this game, Pakistan has been forced both to act and react through a traditional security-first approach. As a result, its prized location has become a bane, yet the benefits of regional connectivity are enormous. With more than 33 percent of people living in extreme poverty in South Asia, the opportunity costs of ignoring regional connectivity are prohibitive.

South Asia’s colossal food security and human development challenges, along with the pressing climate challenges, cannot be mitigated without coordinated actions and responses. Indeed, connectivity is critical not only for Pakistan but the entire region. According to a report published by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), enhanced levels of regional connectivity would allow South Asia to emerge as an “important hub of trade between Europe and Central Asia, on the one hand, and South-East and East Asia, on the other, thereby contributing to broader regionalism in Asia and the Pacific.”

With China in the north, India’s large market in the east, energy and resource-rich countries in Iran and Afghanistan, and proximity to the CARs through Afghanistan, Pakistan is ideally placed to offer multidirectional connectivity if South Asia were to embody cooperative geoeconomics. Pakistan simply needs to realign its foreign policy and explore maximum alliances for the national interest. The interdependence of nations on trade and economic benefits simply can’t be undermined due to geo-political shifts or rivalries.

International trade contributes towards higher growth by accelerating the speed of technological progress. When the goods cross borders, so do people and ideas, and a larger volume of trade opportunities are created, thereby inducing innovation by increasing the competition. Research has proven that an increase in trade directly leads to more innovation triggering a cycle of progress and economic growth. Pakistan has bilateral investment agreements with Australia, Azerbaijan, Mauritius, Bahrain, Bangladesh, Morocco, Belarus, Netherlands, Belgo-Luxemburg Economic Union, Oman, Philippines, Bosnia, Portugal, Bulgaria, Qatar, Cambodia, Romania, China, Singapore, Czech Republic, South Korea, Denmark, Spain, Egypt, Sri Lanka, France, Sweden, Germany, Switzerland, Indonesia, Syria, Iran, Tajikistan, Italy, Tunisia, Japan, Turkey, Kazakhstan, Turkmenistan, Kuwait, U.A.E, Kyrgyz Republic, United Kingdom, Lebanon, Uzbekistan, Laos and Yemen.

These investment treaties also generally include dispute settlement provisions which help in case the dispute arises. Furthermore, Pakistan has free trade agreements with Sri Lanka, China, and Malaysia. Pakistan is also a part of the South Asian Association for Regional Cooperation (SAARC) and has preferential trade agreements with Iran, Indonesia, Turkey, and Mauritius. The United States and Pakistan have had a bilateral tax treaty in force since 1959, furthermore, Pakistan and the United States signed a Trade and Investment Framework Agreement (TIFA) in 2003, which provides a forum for discussion of bilateral trade issues.

Pakistan also has double taxation agreements with Austria, Canada, Germany, Indonesia, Italy, Lebanon, Mauritius, Poland, Switzerland, Turkmenistan, Kazakhstan, the United Arab Emirates, Belgium, China, France, Greece, Iran, Japan, Libya, Saudi Arabia, Romania, Sweden, Belarus, Hungary, Jordan, Kenya, Kuwait, Malaysia, Netherlands, Nigeria, Norway, Oman, Philippines, Qatar, South Africa, Syria, Tunisia, Uzbekistan, the United Kingdom, Bangladesh, Denmark, Finland, India, Ireland, South Korea, Malta, Singapore, Sri Lanka, Thailand, Azerbaijan, and Turkey.

With all these bilateral or multilateral trade, taxation, and investment agreements in place, Pakistan needs to reassess those agreements which have positive association benefits and which have adverse effects on its local industry and commerce. Better connectivity and trade agreements could unlock the benefits of trade for Pakistan, or else it can create harm to the economy. It is on record that trade agreements benefited Pakistan since few industries have grown substantially while others have also contracted enormously due to cheaper goods import and disadvantages in local manufacturing, hence killing the local industry. Pakistan’s geo-position and geo-economics shall benefit the national interests, and not create adverse for the country. An effective strategy in coordination with the Ministry of Foreign Affairs (MoFA) and effective review from the Trade Development Authority of Pakistan (TDAP) shall path the pathway by reevaluating all existing international trade alliance agreements and exploring new venues for the strategic benefit of Pakistan and its national interest