The PML-N Government & Economic Diplomacy

The incumbent Nawaz Sharif-led Pakistani government is poised to give a new direction to the foreign policy wherein all Pakistani missions abroad have been directed to vigorously pursue economic diplomacy that will, in turn, promote Pakistan’s interests in the realms of trade, foreign investment and economic cooperation.

Traditionally, the focus of our foreign policy has been on strategic relations with international community. However, for the first time ever, it has been realized that internal strength lies only in sustained economic growth that may lead to overall well-being, progress and prosperity of all the Pakistanis. Pakistan’s foreign missions have, indubitably, a pivotal role in advancing this objective of the national agenda.

The economic diplomacy, in simplest terms, means that all other policy considerations are subservient to economic policy. By coining the term and pursuing economic diplomacy, it seems that the PML-N government is trying to follow the footsteps of China where since reforms of 1980s, all the subsequent governments have mainly focused on economic development by refraining from wars, de-escalating tensions with other countries, and promoting economic and trade relations even with their foes. This explains as to why the Indo-China bilateral trade has already crossed $70 billion and the two countries are poised to achieve $ 100 billion mark by the year 2015.

The strategy of the PML-N government to achieve the goal of economic prosperity through economic diplomacy is unfolding clearly. It seems that the immediate attention of the government will be on Pakistan’s neighbours. It is right in the sense that unless the region is peaceful, efforts for growth and development cannot succeed. In this connection, the government should try to build a regional consensus on supporting peace and stability in Afghanistan. It is clear that a policy of an Afghan-led, Afghan-owned peace process will be followed.

With India, Mr Sharif has already announced a restart from 1999 position and to progressively seek normalcy in Indo-Pak relations while actively striving to resolve the Kashmir issue. Former Foreign Secretary Shehryar Khan has been formally designated as a focal person for backchannel diplomacy. Both Indian and Pakistani premiers will have at least three opportunities to meet: on the sidelines of the UN General Assembly session in September in New York; on the sidelines of Commonwealth Heads of Government Meeting (CHOGM) in Sri Lanka in November; and during the SAARC Summit in Nepal next year. In addition, the present government is also likely to grant most-favoured-nation status to India.

An ‘enhanced’ partnership with China has assumed the highest priority for the new government. It is believed that Pakistan-China Economic Corridor will open up the underdeveloped areas of the country to a new era of economic development by linking them through a network of highways and railways. Through this ambitious project, it is believed that three billion people from China, South Asia and Central Asia will be benefitted. The current Pak-China trade volume of $12 billion will increase to $15 billion by 2015.

The economic corridor is equally in the interest of both China and Pakistan. The exports to the West from western or South-western China are first transported to Shanghai or some other port in Eastern China. The vessels may take more than a month to reach the Arabian Sea just parallel to Gwadar port. By that time, perishable items may outlive their utility. In contrast, once the said corridor is completed, the same items will take just four to five days to reach Gwadar from the same regions in China. If Pakistan can provide transit facility to just $50 billion foreign trade of China through the proposed corridor, it may earn billions of dollars through duties, refuelling and maintenance of vehicles, etc.

In addition, the government has also initiated the process to seek easy markets and enjoying GSP+ status in European markets. The Bilateral Investment Treaty (BIT) talks with the US stand resumed. The recent Pak-US Business and Investment Conference in the UAE pledged an investment of $150 million in Pakistan.

The penchant of pursuing economic diplomacy though seems a formidable challenge but with prudent policies and pragmatic approach, the objectives can be achieved. It also entails many challenges. Some of them, in the way of economic diplomacy, are energy crisis and terrorism. Moreover, the economic corridor will pass through unknown and underdeveloped areas of Pakistan and would, therefore, pose a big security challenge. Lahore-Islamabad-Peshawar Motorway should be taken as a model from all perspective ranging from security to maintenance and from its quality to the standard while constructing the Pak-China Economic Corridor.

The economic diplomacy can also help minimize the energy crisis. The government has directed Pakistan’s foreign missions to identify potential trade partners to address the energy crisis and formulate tangible project proposals in the traditional and renewable energy sectors. Effective economic diplomacy would require synergistic relationship between the Diplomatic Missions and the relevant stakeholders in Pakistan including Government Ministries and the business community at large.

The government must plug the sources of both internal and external funding to various extremists groups besides seeking cooperation of regional and global community to eradicate terrorism. The government must act on this front comprehensively. The sooner it acts, the better it is for successful pursuit of economic diplomacy

By: Shaukat Piracha


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