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STRUGGLING to stave off a financial crisis, the Imran Khan government brought back its top diplomats from at least 11 key capitals to Islamabad for a two-day ‘conference on economic diplomacy’ last week.

Organised by the Ministry of Foreign Affairs, the conference was supposed to provide the country’s key trade and investment officials an opportunity to woo much needed foreign private investment and boost exports with the diplomats.

Will this initiative help align the nation’s development and economic goals with its security-focused foreign policy during 2019 and beyond? Not really.

Pakistan’s current economic and financial challenges are directly or indirectly linked to its foreign policy choices. They allow the country’s diplomats to look at bilateral and multilateral cooperation only through a ‘prism of national security’ at the expense of its economic and development priorities.

Successive governments have ignored the crucial importance of economic diplomacy, and failed to prioritise development goals in international relations owing mainly to decades of generous multilateral aids and loans because of Pakistan’s privileged position in the US foreign policy agenda.

Pakistan’s current economic and financial challenges are directly or indirectly linked to its foreign policy choices

However, the global economic and geopolitical conditions are changing with Pakistan losing its privileged status in Western powers’ global agenda. The deteriorating Pak-US ties have worsened in recent years and bottomed under President Donald Trump with the suspension of military aid and drastic reduction in civil assistance.

The difficulties Islamabad is facing in securing a new bailout package from the International Monetary Fund is also indicative of its deteriorating relationship with Washington.

Pakistan’s placement on the grey list of the Financial Action Task Force of the Asia/Pacific Group is yet another indication of its declining relationship with international institutions.

Foreign policy experts underscore the need for actively pursuing economic diplomacy because they think it will continue to become difficult for Pakistan to access bilateral and multilateral assistance in the future even if tensions between Islamabad and Washington ease.

Given its financial and economic difficulties and changing geopolitical dynamics, it is high time for Islamabad to make trade and investment promotion the cornerstone of its foreign policy and vigorously pursue economic diplomacy to for growth.

Several countries from Barbados, South Africa, Ireland, Zimbabwe and Hungary have done the same by merging their foreign and trade ministries or by creating powerful trade and investment councils at their foreign offices to promote their development interests globally.

“Look at China. It has been quietly focused on its economy since 1980, putting its political and territorial disputes aside. We also see India increasing its trade with China despite a war and outstanding border dispute with Beijing. India has also significantly increased its trade with Bangladesh and Sri Lanka disregarding political disputes with them,” Manzoor Ahmed, who was Pakistan’s World Trade Organisation (WTO) representative between 2002 and 2008, points out.

“On the other hand Pakistan signed the Economic Cooperation Organisation Trade Agreement in 2003 and The South Asian Free Trade Area agreement in 2006; none have taken-off thus far because we are used to viewing everything through security prism.

“Our economic agenda doesn’t figure anywhere in our foreign policy. We haven’t has a representative at the WTO for months because the previous one appointed by the PML-N government was recalled earlier and his deputy is doing a Staff College course. That gives a fair idea of our foreign policy choices,” he concludes.

Simbal Khan, an Islamabad-based independent governance and security consultant, isn’t hopeful of the government resetting its foreign policy priorities any time soon.

“Economic diplomacy means the economic and financial goals of a country drive its internal and external policies; it means a country shouldn’t shy from establishing and increasing it’s economic and trade relationships even with its enemies.

“Pakistan weighs its international relationships on the basis of the quantum of support it gets on its stance on Kashmir and against India rather than on the basis of its economic and development interests. A real change in our foreign policy will mean a shift from security-led priorities and flexibility on the establishment of trade ties with India. Doing so does not mean giving up on our (political and territorial) stand,” she says.

Syed Nabeel Hashmi, a former chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers, argues that the first step towards a shift to economic diplomacy requires placement of credible professionals.

Instead of political loyalists or junior career diplomats who are difficult to communicate with and are usually unresponsive to businessmen, individuals with knowledge of international trade, business and investment should be placed in the country’s embassies and missions abroad.

“The government should consider active, successful overseas Pakistanis with local knowledge and networks for the job of commercial officers abroad. They can prove to be a better choice for export and investment promotion, as well as for securing greater market access and improving the country’s perception, a major trade barrier for our exporters.”

But people like Shamshad Ahmed Khan, who served as Pakistan’s foreign secretary between 1997 and 2000, don’t agree that the country’s foreign policy is totally devoid of economic content.

He is of the view that a country that is not secure can’t thrive economically: “You cannot put security on the side. Still about 60-70 per cent of our foreign policy is about economic diplomacy.”

Published in Dawn, The Business and Finance Weekly, December 31st, 2018

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