Our increasing reserves

Published: March 14, 2014
The writer hosts a show on Express TV and works as a consulting editor at The Friday Times

The writer hosts a show on Express TV and works as a consulting editor at The Friday Times

Pakistan’s finance minister has proudly announced that a friendly country has deposited $1.5 billion in our reserves and more is likely to follow. The impact of this cash injection has been the stabilisation of the rupee and its dramatic appreciation in the past few days. This may prove to be good for arresting inflationary trends and decreasing energy prices. However, the underpinnings of this generous assistance are lesser known. Usually, bilateral agreements operate under a legal framework and there is a semblance of transparency. However, this case remains mysterious thus far. The government needs to tell parliament and the people as to what the deal with the friendly government entails. Recent developments on our foreign policy — hostage to worn-out doctrines — may provide some clues.

In recent weeks, there have been high-profile visits of Saudi officials and the joint statement issued on the visit of Deputy Prime Minister Crown Prince Salman Bin Abdulaziz, in February 2014, indicated a shift in Pakistan’s approach to the ongoing Syrian crisis. Discarding the earlier policy stance, Pakistan and Saudi Arabia, in addition to the usual diplomatic platitudes, agreed on the “formation of transitional governing body with full executive powers enabling it to take charge of the affairs of the country”. This, essentially, means the ouster of the Assad regime.

States choose their positions and set relationships based on what is perceived as ‘national interest’. In the case of post-1971 truncated Pakistan, national interest was set by the populist Zulfikar Ali Bhutto with a vision of unifying the Ummah and rhetorical anti-imperialism. With the ouster of Bhutto in 1977, the military adopted his policy architecture and added ‘jihad’ as a central pillar. Since then, we have had an uninterrupted penchant for jihad and to create demand for it, popular education and narratives were reset on why it was necessary to support or in the least, tolerate the semi-private jihadi infrastructure.

The events of 9/11 came as a rupture to Pakistan’s policy environment and there were substantial reversals to the jihad policy as well. But in Afghanistan, the reliance on the Taliban as a just and friendly force continues to inform the way we look at the post-Nato region. Such has been the acceptability of jihad that the offshoots of the Afghan Taliban, i.e., their Pakistani counterparts, are now widely considered as legitimate stakeholders in the country. A new battleground — Syria — has emerged where Pakistan is considered a potential player in the old US-Saudi-Pak triumvirate.

A recent story in the Gulf News, which was later denied, stated that Saudi Arabia was seeking anti-aircraft and anti-tank rockets to aid the Syrian rebels. Another statement from the head of the Syrian opposition announced that new arms would be arriving soon. It would be unfair to assume that this story is true unless there is official confirmation from our side. However, given our history and the foreign policy matrix, this may just fall into the realm of possibility.

For decades, Pakistan’s foreign policy has ignored the imperatives of regional cooperation due to the ‘threat’ from India. The relationship with China is hardly economic in nature and suits the purposes of the national security apparatus. Energy deficiency has cost us losses in GDP and the need to buy expensive oil to run power plants has resulted in chronic stagflation. Yet, we have almost ended the Iran pipeline project that could have been a rational response to the energy crisis at home.

Trading with India is also stalled and Punjab Chief Minister Shahbaz Sharif was cited by the UK’s The Guardian (February 13) that security agencies in Pakistan were opposing the PML-N’s quest to open trade with India. Sharif’s office issued denials but the message had been sent across. It might be useful to remind Pakistan’s elite that China and Taiwan trade goods and services worth $200 billion. Similarly, India and China’s trade volume is close to $70 billion per annum. On the other hand, we are stuck with military cooperation, bailouts and fighting the bogeys we have created for ourselves.

Whatever hope one had for the Sharif Administration to reset foreign policy goals is waning fast. Pakistan’s faces a unique situation in the region, where Iran, the US, Afghanistan, India and the Central Asian states are fast converging on common interests. Given the besieged civilian government, it is unlikely that the foreign policy ambitions and priorities will change, at least not in the short term. We are an ideological state after all.

Published in The Express Tribune, March 15th, 2014.

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Reader Comments (9)

  • Saqib
    Mar 14, 2014 - 11:22PM

    Trade with India is not the panacea that will solve all of our problems. We need to set our house in order.Recommend

  • Pmahmud
    Mar 15, 2014 - 12:36AM

    Raza, Right now the geopolitical game around is in a flux. Most players are holding their cards close to their chest. You are too hasty in constructing new blocks. Foreign affairs are not ideological but based on self interest. Also keep in mind that importance of players depend on amount of excess resources they are willing to sacrifice to achieve a goal. Your ideology being liberal does not mean a thing if you have no presence on the ground. Just wait and things would clarify by year end.
    By the way it would take years for Iran and US to be on same page.


  • Nikki
    Mar 15, 2014 - 7:10AM

    Good write up:
    Foreign policy is affectd by internal dynamics directly. Every country thinks before it inititate any type of deal.Its realism not idealism by the way.Always INERESET/BENEEFITS matter not ideology.In Pakistan’s context, civilian and military both regimes remaind focused toward particular countries during and after the Cold War,now they need to re-evaluate all previous mischieves whcih have been done in tha name of ‘national interest’.


  • Tani
    Mar 15, 2014 - 7:32AM

    Pakistan has taken all irrational strategic international policy decisions of aligning, fighting others war,exporting extremism on self interest based on perception “threat from india” ,and now it’s suffering from its repercussion. Only if it had ended all those T factories, built trust and diplomacy with trade and friendship, no kargil or Mumbai, we could have moved forward and this trust deficit wudnt have been there. We could fear twoway war front from chinpak but we are not paranoid and moe focused on economy.
    One can learn from indo-china relations.Other than occasional soldier border movement thaws, indo china relations are very peaceful and friendly. It has left border dispute for future generation with frequent talks here and there. Instead we are focused on enhancing business and trade, competing on economic level, as well favouring each other and joining hands to vote against developed countries in crucial issues concerning developing world and Asia matters. Both are valuable and indispensable partners to each other despite a war. Srilanka bangladesh nepal Bhutan Maldives etc don’t consider indias rise as threat. Only Pakistan, so with “india threat” paranoia has to change. frankly we are not interested in war or capturing pak, it’s wrong perception why wud we burdon extra 180million population on our head with already 1.2 billion population? Indias focus is on economic development and progress.


  • wonderer
    Mar 15, 2014 - 8:38AM

    “……..We are an ideological state after all……”

    Of course we are, but can someone specify what our ‘ideology’ is?


  • Mar 15, 2014 - 11:24AM


    Pakistan has 4 neighbours. Out of this 4 realistically speaking the combined GDP of India and China is close to 95%, if not more.

    If Pakistan does not trade with India, it loses more than 50% of trade potential in its neighbourhood.

    Neighbours are the best trade partners. India-China trade will overtake the entire GDP of Pakistan. Do you think then that China will help Pakistan at the chagrin of India?

    It is very crucial for the Economy of Pakistan, especially the exports category, that it establish trade relations with 1/6th of the world, living right next door.

    Only a fool will deny India’s importance in reviving Pakistan’s economy.Recommend

  • Nikki
    Mar 15, 2014 - 1:49PM

    Good article


  • Aamir
    Mar 15, 2014 - 5:41PM

    A good one.
    I hope we the foreign policy is made keeping in mind long term goals. But it does not seem like the situation with the present govt.
    Why complain about Musharraf that he sold the nation for dollars, when a political leader is also doing the same?


  • Mar 18, 2014 - 10:21PM

    there is a price tag for everything in this world . Debate should be on he price and not the material sold.


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