Redesigning alliances: Pakistan’s diplomatic shift and economic triumphs

The year 2023 began with critical economic challenges for Pakistan and an exceptional surge in militancy, but ended with a silver lining as Pakistan’s stock market gained its fastest pace in 20 years, touching record highs and reaching above 60,000 points. 

During the last year, Pakistani media repeatedly reported about the Afghan interim government not helping Pakistan stop large-scale smuggling of currency and edibles to Afghanistan, while the Pakistani government kept blaming militants residing in Afghanistan for attacks in Pakistan. Afghanistan explained its viewpoint that Pakistan must put its house in order, instead of blaming Afghanistan for failures to control smuggling and militancy. The series of exchanges that occurred between Kabul and Islamabad show that Pakistan has redesigned its foreign relations with Afghanistan, with Islamabad claiming that extraordinary measures against the smuggling of edibles and foreign currency, coupled with strict rules for Afghans at the border, brought positive results in the forex market and translated into reduced prices of edible items in Pakistan. 

Now Afghans cannot visit Pakistan without visas and valid travel documents and the practice of entering Pakistan with “Rahdari” — a document that was just a permission letter — has completely been banned, while Islamabad’s order for all undocumented immigrants, including 1.7 million Afghans to leave Pakistan has been a major shift in its foreign policy toward Afghanistan. 

Exploring economic and political gains by forging stronger bonds with global players, including Saudi Arabia, the UAE, the European Union, and the United States, benefit Pakistan. 

- Shazia Anwer Cheema 

A cursory look at Pakistan’s diplomatic engagements during 2023 reveals a visible axis away from a regional perspective and toward a global outlook. The list of these engagements shows no bilateral or multi-lateral engagements with neighboring countries such as India, Bangladesh and Sri Lanka. This pattern indicates that Pakistan’s diplomatic priorities no longer lie within the region. While distancing itself from neighboring countries except for China, Pakistan has made clear a preference for a strategic approach to maximize its economic gains to avoid subservience to major powers and increase its room to maneuver by engaging with China, Russia, the US and the EU. 

During the first half of 2023, former prime minister Shehbaz Sharif visited Azerbaijan, Turkiye, the UAE and the United Kingdom, while former foreign minister Bilawal Bhutto Zardari visited Iraq, Hungary, Japan, Jordan, Lithuania, Russia and the United Arab Emirates. Similarly, former state minister for foreign affairs, Hina Rabbani Khar, undertook official visits to Belgium, Denmark, Norway, Qatar, Sri Lanka, Sweden, Uzbekistan, and the United Kingdom. In the latter half of 2023, Pakistan’s interim prime minister, Anwaar-ul-Haq Kakar, undertook bilateral visits to Kuwait, the United Arab Emirates, China, Saudi Arabia, Uzbekistan and the United States. All these were focused on showcasing the Special Investment Facilitation Council (SIFC) that Pakistan set up in 2023 for the sake of economic revival by significantly expanding the investment pie from foreign and domestic sources, achieving macro-economic stability, and by bringing socio-economic prosperity. 

Background discussions with several retired and serving diplomats suggest that Pakistan’s “look outside” policy is a smart move because regional players like India, Bangladesh, Sri Lanka, and Nepal do not offer Pakistan tangible trade and economic opportunities and regional forums, such as SAARC, have lost prominence and failed to offer anything that could help Pakistan stabilize its unsteady economy. Exploring economic and political gains by forging stronger bonds with global players, including Saudi Arabia, the UAE, the European Union, and the United States, can benefit Pakistan. Moreover, joining wide-ranging platforms, such as BRICS, which includes global players, is a much better move than sticking with regional players who have nothing to offer. 

One can understand that the newfangled foreign policy vision is based on projecting and advancing a softer image of Pakistan, elevating it as a regional middle power, and focusing on prioritizing geoeconomics over geopolitics. 

The control over foreign currency smuggling to Afghanistan, expected foreign investment from Middle Eastern countries, and China’s revitalizing interest in CPEC were some of the factors that were directly linked with a stable end of the year, and all such developments were made possible through Pakistan’s diplomatic focus on the Middle East and China. Meanwhile, the engagements with EU countries and the United States helped Pakistan get out of the FATF grey list and secure IMF loans. Overall, the year 2023 can be called a successful year with regard to foreign affairs developments and fixing the error Pakistan had been repeating for long. 

- The writer is an author, columnist, and foreign affairs expert who writes for national and international media. She can be reached at @ShaziaAnwerCh Email: [email protected]