Pakistan’s Geoeconomic Pivot: Strategies, Opportunities And Challenges – Book Review
International Relations are in a state of flux. After the end of Cold War, national strategies of several countries shifted from geopolitics to geo-economics. Moeed Yusuf and Rabia Akhtar’s book, Pakistan’s Geoeconomic Pivot: Strategies, Opportunities and Challenges, comprises four chapters that deal with the conceptual understanding of geoeconomics, strengthening regional connectivity, developing partnerships and suggest way forward for overall national development.
Chapter I, ‘Unpacking Geoeconomics’,focuses on the conceptual and theoretical perspectives of geoeconomics. The term geoeconomics dates back to 1990 when an American scholar Edward Luttwak presented it as an extension of geopolitics, a way to use economic means to pursue geopolitical goals (p. 4). Later Robert D. Blackwill and Jennifer M Harris made a distinction between geoeconomics and geopolitics. They are of the view that geopolitics predicts state power concerning a set of geographic factors and geoeconomics does the same in the context of a bevy of economic elements (p. 4). With regard to Pakistan’s geoeconomic pivot, the authors underscore that Islamabad must use geoeconomics as a cooperative, win-win paradigm rather than a bloc-politics weapon (p. 5).
Chapter II, ‘Strengthening Regional Connectivity: Options and Challenges for Pakistan’, presents a comprehensive analysis of Pakistan’s potential as a connectivity hub and its regional connectivity projects. National Security Policy (NSP) 2022-2026 and Pakistan’s Vision 2025 place regional connectivity as a major pillar of growth (p. 13). The authors have underlined that China as an economic giant in its north, India’s large market in the east and energy and resource-rich neighbours like Iran, Afghanistan, and Central Asian Republics (CARs), Pakistan’s ideal geographical location offers multidirectional connectivity routes to its neighbours (p. 13).
The authors are of the view that South Asia’s cooperative economic potential has been stymied by geopolitical exigencies (p. 13). Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project could not achieve desired results because it passes through restive areas in Afghanistan (p. 22). The World Bank and other US donors have stopped funding Central Asia-South Asia (CASA-1000) after Taliban’s takeover in Afghanistan. CASA-1000 is an electricity transmission and trade project that aims to facilitate the transmission of surplus electricity from Tajikistan and Kyrgyzstan to Afghanistan and Pakistan is also disrupted due to the same reasons (p. 22). Turkmenistan-Uzbekistan-Tajikistan-Afghanistan-Pakistan (TUTAP-500) is a power interconnection project that aims to connect energy infrastructure from Central Asian countries to Pakistan via Afghanistan.
The authors have emphasized the importance of digital connectivity and underscored Pakistan’s digital connectivity potential under the China-Pakistan Economic Corridor (CPEC). Pakistan-China Fiber Optic Project aims to provide an international gateway for data traffic routes between China and the Central Asian countries, the Middle East, Africa, Europe and beyond (p. 24). The authors have mentioned that Gulf countries are looking forward to diversifying digital connectivity in which Pakistan can play a leading role. Pakistan has co-founded the Digital Cooperation Organization (DCO) with Gulf Cooperation Council (GCC) to accelerate the advancement of digital economy. By collaborating with the GCC nations, the DCO seeks to unlock the full potential of digital technologies and create opportunities for shared growth and progress (p. 25).
Chapter III, ‘Developing Partnerships’, encompasses a debate on enhancing trade and investment in Pakistan and reducing its reliance on foreign debt. It also traces Pakistan’s financial assistance from regional and extra-regional powers. From 1947 to 2020, Pakistan received $72.6 billion in aid from the US, China, Gulf countries, Japan, Europe and other nations. The authors noted that between 2001 and 2023 Pakistan received nearly $17 billion from the US for security and development purposes. However, the aid received was not used transparently to assure sustainable economic growth (p. 28).
The authors have underlined that Pakistan’s exports have been gradually decreasing as compared to imports since 1972. In 1972, Pakistan's imports made up 8.6% of its GDP, whereas in 2021, they accounted for 18% of the GDP. (p. 29). The authors have noted that since 1948, Pakistan’s exported goods and export destinations have remained almost the same. In 1948, Pakistan exported primarily raw materials and partly manufactured goods, such as jute, cotton, wool, hides and skins, sports goods, bones, and surgical items. Today, the country continues to export these items, with the addition of textile products, cotton, leather and animal gut articles, copper, and fruits. The primary recipients of Pakistan’s exports in 1948 were the US, UK, India, Belgium, Germany, France, China, and Italy. In 2021, the list remains almost the same with the addition of Spain, the UAE and Afghanistan and the subtraction of India as major trading partners (p. 29).
The authors suggest that Pakistan should expand its export-led economy. A limited basket with low competitiveness exposes Pakistan to external fluctuations and shocks in global demand and leaves it dependent on inclusion in special development schemes like the EU’s GSP-Plus status. The authors have recommended: (i) improving infrastructure, particularly in the transport and energy sectors to get easy access to international markets; (ii) providing a conducive environment to attract Foreign Direct Investment (FDI); (iii) targeting new markets including Central Asia, Africa, South America, and Southeast Asia; and (iv) exporting meat to China and Southeast Asia, particularly Japan, South Korea, Indonesia, and Malaysia, as well as to Latin American countries. The authors have mentioned that Pakistan needs to explore its potential for trade in South Asia and beyond. The trade between South Asian countries can be increased by $25 billion to $67 billion. World Bank estimates the annual trade potential between India and Pakistan to be USD 37 billion, compared to the existing volume of USD 2 billion. It further points out that 85% of the unrealized regional potential trade of Pakistan is with India (p. 33). The authors highlighted that formal trade ties between India and Pakistan are stalled at the moment, but informal trade has continued to thrive and is projected to be more than USD 4.71 billion a year, goods are shipped through Dubai, Iran, and Afghanistan (p. 33).
Chapter IV, ‘The Way Forward’, focuses on how to overcome the impediments to realize Pakistan’s geoeconomic pivot. The authors have suggested that: (i) Pakistan needs to ensure continuity in economic decision-making; (ii) domestic and regional peace and stability are prerequisites for effective geoeconomics; (iii) Pakistan’s foreign policy orientation would also have to be recalibrated in favor of economic diplomacy; and (iv) Pakistan should focus on its potential to be a regional connectivity hub through CPEC. The authors have emphasized that Pakistan’s efforts should focus on explaining to other countries that the infrastructure developed as part of CPEC is now available for anyone to utilize for investment in the Special Economic Zones (SEZs) or elsewhere in the country. The authors further emphasized that attractive incentives for third countries, starting with Pakistan’s partners in the Gulf who have already shown interest, should be created to invest in new projects (p. 42).
The book is an interesting read for students, practitioners and scholars of International Relations. It is especially helpful for researchers focusing on regional connectivity and development. The authors have provided possible options for Pakistan for utilizing its geographical location as a connectivity hub and how Pakistan can navigate the complex interplay of regional connectivity, economic diplomacy and development and shared prosperity in an increasingly geopolitically divided world.