Not by words alone

Published June 14, 2021
The writer is a former ambassador to the US, UK & UN.
The writer is a former ambassador to the US, UK & UN.

THERE have been a series of official pronouncements that the government is shifting the focus of Pakistan’s foreign policy from geopolitics to geoeconomics. This ‘shift’ was first announced in March during the ‘Islamabad Policy Dialogue’ organised by the National Security Division and addressed by Pakistan’s political and military leaders.

As summarised on a government website this ‘dialogue”’ outlined a ‘new’ policy direction that involved prioritising economic security, changing the “narrative of geopolitical contestation to geoeconomic cooperation”, increasing “Pakistan’s economic footprint globally” and promoting “regional connectivity”. The foreign minister stated several times since that the government is working on transforming the country’s “geopolitics to geoeconomic policy”.

Read: To achieve success at geoeconomics, Brand Pakistan must capture the imagination of the global business press and investment community

If these assertions mean that Pakistan will henceforth subordinate its geostrategic aims to strengthening its economy and reorient foreign policy to serve the country’s domestic economic interests and promote growth and prosperity then it is a welcome shift. However, any policy shift must have substance and clarity otherwise it remains a declaration of intent. As these official statements have yet to be elaborated or specify the means by which the policy is to be pursued, the ‘shift’ is, for now, a desire not a strategy.

Conceptual and operational clarity is essential before announcing a policy change as is its timing. It is questionable how geoeconomics will be separated from geopolitics as the two are interrelated. Moreover, at a time when Pakistan is confronted with more than one geopolitical storm — regional and global — how exactly will the country negotiate geopolitical challenges while pivoting to geoeconomics? Afghanistan is at an inflection point facing the growing danger of descending into chaos with serious ramifications for Pakistan’s security. Relations remain tense and unpredictable with India which continues on a repressive course in occupied Kashmir with demographic changes and further bifurcation of the state looming, which is bound to further inflame the situation. US-China confrontation is casting a shadow over the region posing a challenge for Islamabad that wants to avoid getting into its crosshairs but may find that a tough balancing act. Thus, geopolitics and Pakistan’s security dilemmas cannot be wished away by declarations alone. A new strategy or policy shift has to be matched to reality. More on this later.

A policy shift must be backed by substance otherwise it is a statement of intent not a strategy.

What is really meant by geoeconomics? The international literature on this is instructive. There is little agreement on how to define geoeconomics with the term used in different ways. Definitions include the geostrategic use of economic power, using “economic tools to advance geopolitical objectives”, achievement of foreign policy outcomes by economic, not military, power projection, and “use of economic instruments to promote and defend national interests, and produce beneficial geopolitical results”. Some see geoeconomics as a form of statecraft that deploys geopolitical power and leverages geography to achieve economic ends.

Edward Luttwak, a US strategic thinker, first forged the term geoeconomics in 1990 in the Cold War’s aftermath. He argued that commerce was displacing military power as a tool for countries to deploy with geoeconomics emerging as an “admixture of the logic of war with the methods of commerce”. Building on previous scholarly works, the book War by other Means by Robert Blackwill and Jennifer Harris contributed to the global debate on the rising role of geoeconomics in the international arena by examining the means adopted by the US, China and others to accomplish foreign policy goals. More and more states they wrote “are waging geopolitics with capital, attempting with sovereign checkbooks and other economic tools to achieve strategic objectives that were in the past the stuff of military coercion or conquest”.

In a recent book titled Geoeconomics and Power Politics in the 21st Century, one of its writers points out that geoeconomics has not entirely replaced military means of statecraft. Both instruments coexist and are deployed by countries depending on what they consider appropriate for the challenges they confront. The book emphasises that in making use of economic tools the factors that count in geoeconomic strategies include markets, resources, and ability to control and direct investment to compete effectively.

Almost all the recent literature identifies China as the world’s leading exponent and “practitioner of geoeconomics”. With ample justification. China’s Belt and Road Initiative is the biggest and most ambitious geoeconomic enterprise of this century. Encompassing over 70 countries and engaging 138 states it aims to build land and maritime networks involving infrastructure, power projects and telecommunications to promote trade and resource flows, achieve economic integration and boost economic growth and development. In Africa and Latin America, Chinese influence has expanded through targeted investments giving it unprecedented strategic outreach.

Geoeconomics has been successfully pursued not just by big powers but smaller and medium-sized countries too. The crucial and obvious requirement is domestic economic strength and resources. Does Pakistan have the economic attributes regarded as prerequisites to pursue a geoeconomic policy? The most fundamental requirement is a strong economy. With an economy perpetually burdened by crises in public finance caused by chronic budget and balance of payments deficits, Pakistan has yet to seriously address these structural problems to achieve sustainable growth. A narrow tax base and failure to mobilise domestic resources has inevitably meant growing indebtedness and reliance on frequent IMF bailouts. A limited and undiversified export base plus lack of innovation has also prevented the country from becoming a player in global markets and economy.

Therefore, if Pakistan wants to pursue a geoeconomics policy in any meaningful way it has to transform its economy, ensure a stable political environment and reorder its internal priorities and budget allocations. Economic power and capability cannot be ‘borrowed’ or ‘imported’ from outside but built at home by undertaking long postponed structural reforms. The essential ingredients of a strong economy are internal.

If by geoeconomics the government means leveraging the country’s location to become a regional hub that vision has been projected by every government since the 1990s. It was never realised because of regional geopolitical tensions and the country’s weak economic fundamentals. And that too requires a strong economic foundation including efficient and attractive markets.

No country can talk its way into effecting a policy shift. Unless it is backed by substance and reflects reality it remains a vision on paper, not in practice.

The writer is a former ambassador to the US, UK & UN.

Published in Dawn, June 14th, 2021

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