Rafia Ashar
In the intricate framework of international affairs, Geo-Politics (G.P) and Geo-Economics (G.E) stand as pillars determining the global landscape. G.P defines the strategic interactions, while G.E underscores the economic underpinnings among nations. Both conceptions are necessary in understanding power dynamics and influence on the world stage. Against this backdrop, countries like Pakistan find itself at a critical stage where the alignment of its G.P with its G.E demands particular consideration. This article delves into the imperative for Pakistan to evaluate and potentially realign its G.E policies to meet the challenges posed by its evolving G.P context effectively.
During the Cold War era, Pakistan was aligned with the US-led Western bloc both in terms of G.P & G.E. This alignment was driven more by strategic needs than shared values, profoundly influencing Pakistan’s political, economic, and ideological trajectory. However, in the post-Cold War era, Pakistan’s G.P interests have steadily tilted towards China, whereas its G.E interests remain anchored with the US-led West. It was necessitated as US-led West chose India, not Pakistan, as a strategic partner in the larger context of potential US-China Rivalry. Hence, India was designated as the net security provider in US’ Indo-Pacific strategy. Pakistan had no choice but to turn to China for its economic & security requirements.
To further illustrate this argument, let’s examine Pakistan’s trade relations with various regions over the past two decades. Analysing trends in trade with ASEAN, China, Middle East, Africa, Europe, Central Asia and North America can provide insights into Pakistan’s G.E alignment in post-Cold War.
The data analysis reveals a distinct pattern in Pakistan’s export dynamics over the past two decades, particularly in comparison to various global regions. Notably, a substantial portion, approximately 27.9%, of Pakistan’s total exports during this period have been directed towards North America. In contrast, exports to other regions such as ASEAN, China, the Middle East, and Central Asia have remained relatively minimal. On the other hand, it is interesting to identify that Pakistan has experienced a significant 31% share in its exports to Europe. Preferential trade agreements such as GSP+ and strategic engagements like the EU-Pakistan Strategic Plan (SEP) have significantly contributed to regional trade growth.
In contrast, an analysis of the import trend presents a nuanced picture. By examining Pakistan’s trade dynamics, it’s apparent that the country’s import portfolio showcases a diverse array of sourcing regions, with considerable contributions from North America, the Middle East and China. Imports from North America signify a modest portion of Pakistan’s total trade, standing at 7.51%, which indicates a diversified strategy in minimizing reliance on any single region. In stark contrast, the Middle East is a crucial trading partner, contributing 38% to Pakistan’s total trade. This substantial percentage is primarily driven by oil imports, underlining its vital role in Pakistan’s energy needs. Conversely, imports from China have also seen notable growth over the last two decades, accounting for 23% of Pakistan’s total trade.
Data also shows a discernible increase in Pakistan’s exports to European markets, inferring a strategic diversification effort and a subtle G.E tilt towards Europe as shown in the graph below. However, Pakistan’s import portfolio has highlighted a strategic pivot towards the Middle East and China as the largest import destinations for Pakistan, as depicted in the graph below. For the remaining regions, there has been a consistent pattern over the years which merits attention of the policy makers.
In order to assess G.E trajectory of Pakistan during Cold War and post-Cold War eras, a comparison of trade among the regions has been made, which is given below:-
The data reveals that Pakistan’s G.P trajectory has significantly evolved, however, its G.E landscape remains largely unchanged, albeit with some improved statistics with China. Despite strong G.P ties, the relatively low volume of Pakistan-China bilateral trade significantly tilted in favour of China highlights a notable gap in accessing untapped G.E potential between the two nations.
It’s high time to understand that G.P and G.E are interlinked. The G.P environment has transformed into multipolar world, and new potential markets are now available to explore. Against this backdrop, Pakistan needs to recognize the inevitability of diversifying its G.E focus further, including strengthening ties with emerging markets in Africa and capitalizing on opportunities within the dynamic Chinese, ASEAN, Middle East, and Central Asian markets. This strategic pivot aims to enrich Pakistan’s role as a regional connectivity hub while confirming robust economic engagement across diverse geographic spectrums.