BR100 Increased By (0.44%)
BR30 Increased By (1.39%)
KSE100 Increased By (0.62%)
KSE30 Increased By (0.61%)
BECO 5.43 Decreased By ▼ -0.06 (-1.09%)
BML 55.69 Decreased By ▼ -1.07 (-1.89%)
BOP 35.38 Increased By ▲ 0.26 (0.74%)
CNERGY 8.20 Increased By ▲ 0.05 (0.61%)
DCL 11.55 Increased By ▲ 0.04 (0.35%)
FCCL 58.36 Increased By ▲ 1.61 (2.84%)
FCSC 5.12 Decreased By ▼ -0.03 (-0.58%)
FFL 17.84 Decreased By ▼ -0.04 (-0.22%)
FNEL 1.25 No Change ▼ 0.00 (0%)
HUMNL 11.07 Decreased By ▼ -0.05 (-0.45%)
KEL 8.75 Increased By ▲ 0.33 (3.92%)
KOSM 6.69 Increased By ▲ 0.11 (1.67%)
MLCF 107.15 Increased By ▲ 3.85 (3.73%)
NBP 201.73 Increased By ▲ 1.55 (0.77%)
PACE 11.30 Increased By ▲ 0.01 (0.09%)
PAEL 44.49 Increased By ▲ 1.02 (2.35%)
PIAHCLA 29.41 Increased By ▲ 1.92 (6.98%)
PIBTL 18.64 Increased By ▲ 0.94 (5.31%)
PPL 247.98 Increased By ▲ 3.66 (1.5%)
PRL 35.29 Decreased By ▼ -0.14 (-0.4%)
PTC 66.14 Increased By ▲ 0.79 (1.21%)
SEARL 95.49 Increased By ▲ 2.17 (2.33%)
SSGC 32.04 Decreased By ▼ -0.90 (-2.73%)
TELE 8.87 Decreased By ▼ -0.04 (-0.45%)
THCCL 66.61 Decreased By ▼ -0.11 (-0.16%)
TPLP 10.57 Decreased By ▼ -0.26 (-2.4%)
TREET 25.30 Increased By ▲ 0.18 (0.72%)
TRG 64.40 Decreased By ▼ -0.50 (-0.77%)
WAVES 10.90 Decreased By ▼ -0.03 (-0.27%)
WTL 1.26 Increased By ▲ 0.01 (0.8%)
BR Research

Need for economic diplomacy

Published August 15, 2018 Updated August 15, 2018 07:07am

Pakistan’s next government would soon resume the delicate dance that is diplomacy. But circumstances are more challenging this time than they were back in 2013. First, the West seems to be nursing a ‘Pakistan fatigue’ – there is disappointment at the umpteenth failure of democratic governance to take root here. Two, Pakistan’s external finances are coming into trouble in an era of economic warfare. And three, its traditional alliances are at risk from the quirks of the strongmen heading some governments.

Diplomacy is almost dead in the era of Donald J. Trump. More and more leaders are now talking tough in public. In some cases, the hardliner attitude is inspired by Mr. Trump’s fire and fury (e.g. Saudi Arabia’s disputes with Qatar and Canada); in some other cases, it is a reaction to the mercurial president’s tweets (e.g. Turkey’s Erdogan as well as Iran’s Rouhani doubling down their anti-US rhetoric).

But since all politics is essentially local, the hard talk is aimed at addressing domestic audiences. Several electorates have lately caught the bug of nationalism, preferring authoritarian leadership style. Regardless of America’s economic belligerence, key EU powers have held their fire so far. Perhaps the NATO allies are hoping to wait out Trump, who is up for re-election in 2020.

What is more remarkable, though, is that despite many provocations, leaderships in two major authoritarian states, China and Russia, haven’t been quite the rabble-rousers. That is completely rational – the former doesn’t wish to disrupt its prosperity; the latter desperately wishes to find a way back to it.

To its credit, Pakistan has also adopted a rational course in responding to US pressure since Mr. Trump took over the White House. But the US has been unrelenting in its intimidation. First, it dragged Pakistan into the grey-list at the FATF earlier this year. Lately, perhaps sensing two kills with one stone, it has signaled to make it a lot more difficult for Pakistan to access the IMF dollars in the future.

As a means of retaliation, Mr. Trump appears to be deploying the economic playbook with other countries, too. He has kicked up a diplomatic spat with its key ally Turkey, which was already in the middle of a currency crisis. Under a bigger gun, of course, is Iran, which is facing public unrest as sanctions begin to bite after the US turned on the multilateral Iran nuclear accord.

Foreign alliances are seldom without contradictions, due in large part to the complexities in the Middle East. A typical mind-bending diplomatic web of friends and foes goes something like this: Pakistan is friends with Saudi Arabia, which is allied with the US, whose sworn enemy is Iran, whose longtime friend is India, which has fought multiple wars with Pakistan.

At the root of such contradictions is the quest to preserve a country’s economic interest. It will be best for the new government to avoid taking sides and to employ realpolitik in dealing with regional and global powers. Attaining a higher level of exports, which is Pakistan’s lifeline for creating millions of new jobs, also depends on a foreign policy that puts a premium on deepening economic linkages in the region and beyond.

Copyright Business Recorder, 2018

Comments

Comments are closed for this article.