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Regional possibilities

December 08, 2017

WE have one more reminder that Pakistan’s regional policies carry a heavy price tag. This time, the Asian Development Bank has emphasised that “a unique opportunity for Pakistan to emerge as a centre of trade and commerce” exists, provided borders can be opened. The statement, given by Xiaohong Yang, the ADB country director, at the Central Asia Regional Economic Cooperation Strategy, underlined the importance of better relations with neighbours and the large “peace dividend” that Pakistan can unlock. The vision for deeper regional economic cooperation is an old one, with CAREC alone emphasising it for almost a decade now, with up to $30bn in resources behind it, and $1.5bn of that coming to Pakistan. But the main stumbling block remains the bitter relations with neighbours such as Afghanistan and India.

Pakistan cannot unlock its regional trade potential on the back of CPEC alone. Without a route through Afghanistan, the distant markets of Russia and the Central Asian republics remain too far to be economically competitive. And by ruling out any talks with India on trade and economic cooperation, Pakistan locks itself away from the growing markets of an important neighbour. Both Afghanistan and India are keen for overland connectivity through Pakistan, something that can provide an effective bargaining tool provided Pakistan is willing to entertain the idea. The regional trade and connectivity potential that Pakistan has due to its location cannot be unlocked fully only on a north-to-south axis. ADB is right to emphasise the idea, and present the possibility of a peace dividend. There might be good reasons for the strain in relations with both neighbours, but it must never be forgotten that these tensions come at a steep price for everyone concerned. The wages of peace far outweigh whatever benefits hostilities bring. The China Pakistan Economic Corridor is undoubtedly a positive programme to advance the benefits of regional connectivity, but it is not the only one. Projects that predate CPEC, such as the Iran-Pakistan gas pipeline, or the CASA transmission line or the gas pipeline from Turkmenistan, all deserve to be energetically followed up on, as well as the projects under CAREC, which dovetail with CPEC. Pakistan’s continued dependence on external powers to finance its weakness on the external account can only be broken when the normalisation of ties with its neighbours is accompanied with domestic reform.

Published in Dawn, December 8th, 2017