For Pakistan, the growing importance of economic diplomacy

For Pakistan, the growing importance of economic diplomacy

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Pakistan’s foreign minister, Shah Mahmood Qureshi, said the other day that economic security was sine qua non for having an independent foreign policy.
“In countries that are drowned in debt, an independent foreign policy cannot be a reality,” he said.
“Our primary focus has been on security since Pakistan came into being and we are in a much better position in that area, but our vulnerability is economic security.”
The foreign minister added that Pakistan would remain subject to the International Monetary Fund’s (IMF) conditionality’s or be forced to seek help from other countries until it became independent economically. Addressing an event, the “Vision Foreign Office,” he informed the audience that the Economic Diplomacy Wing of the foreign ministry was being overhauled to improve Pakistan’s economic outreach.
Like other professions, diplomacy has evolved over time. Till the cold war era, politico-military alliances and counter alliances were the focus of diplomatic activity. Envoys would cultivate politically important leaders in the host country and report on major developments there. Gradually, the concept of economic security and cooperation started gaining traction in the second half of the last century.
The establishment of the European Union was followed by the creation of regional groups like ASEAN, SAARC and NAFTA. Regional economic cooperation and free trade areas were the new buzz words. General Agreement on Trade and Tariff (GATT) followed by the World Trade Organization(WTO) evolved with a specific goal of international trade promotion and its regulation.
Nations were now rated as much on their economic prowess as on military strength. Japan and Germany emerged as new international powers due to their post- world war economic strides. Economic development and financial autarky helped them gain political influence and diplomatic clout as they could now extend assistance to the developing nations. The erstwhile Soviet Union was a formidable military power but floundered because of economic vulnerabilities. The quest for economic security now became an important part of foreign policy.
Pakistan is a founding member of the South Asian Association for Regional Co-operation (SAARC). The objective of this regional organization was to promote economic, cultural and social development in South Asia with a view to enabling member states achieve self-reliance. Barely functional now, this regional body of great promise has been paralyzed by the conflicts and resultant acrimony between two major member states. Consequently, South Asia is the least connected region in the world, with a low mutual trade volume. This sad situation has impacted member states’ efforts at poverty alleviation negatively.

With the completion of the China Pakistan Economic Corridor (CPEC), Pakistan will be at the hub of extensive regional connectivity. Apart from China and Pakistan, many regional nations including Afghanistan, Iran, Central Asian Republics, the GCC countries and East Africa could benefit from this gigantic project.

Javed Hafeez

Connectivity promotes international trade. With the completion of the China Pakistan Economic Corridor (CPEC), Pakistan will be at the hub of extensive regional connectivity. Apart from China and Pakistan, many regional nations including Afghanistan, Iran, Central Asian Republics, the GCC countries and East Africa could benefit from this gigantic project. India could reap economic bonanza by exporting its wares to Central Asia via Pakistan. But for that win-win situation to evolve, a mutually acceptable and peaceful resolution of Indo-Pakistan disputes is necessary.
We live in a global village where physical connectivity has vastly improved and information travels at the speed of light. This has led to the multiplication of trade volumes and foreign direct investments.
Today, a majority of diplomatic missions have commercial and economic wings. They promote trade, help settling commercial disputes and seek new avenues of investments. Missions organize trade exhibitions and conduct commercial research. Countries send experienced diplomats to the WTO, to watch their commercial interests with a keen eye. The Joint Economic Commission is now a familiar forum to discuss and promote economic relations. Many nations judge the performance of their envoys abroad through their trade promotion efforts.
I took charge as Ambassador to Greece in 1999 and found the Greek government keen for high level interaction with Pakistan. However, when General Musharraf toppled the civilian government, the European Union decided that no high-level visits with Pakistan would be exchanged till democracy was restored.
Thereafter, the embassy decided to focus on trade promotion, even though there was no dedicated commercial wing in it. An exclusive trade exhibition was organized in a centrally located five-star hotel, where all the important export items of Pakistan were displayed. The exhibition was accompanied by a display of Pakistani paintings and a fashion show of Pakistani garments. Top Pakistani and Greek models cat-walked wearing Pakistani dresses in front of Greek importers. Over three hundred invitees were entertained with Pakistani food and music. The event alone gave a significant boost to our exports to Greece.
The recent debt re-scheduling by the G-20, headed by Saudi Arabia, was a result of the diplomatic efforts of borrowing nations which cited COVID-19 as their basic argument. Current trade and tariff issues between two major economic powers also call for deft economic diplomacy.
The fact is, economic diplomacy is here to stay in the larger international interest as trade and investments promote peace.
– Javed Hafeez is a former Pakistani diplomat with much experience of the Middle East. He writes weekly columns in Pakistani and Gulf newspapers and appears regularly on satellite TV channels as a defense and political analyst.
Twitter: @hafiz_javed

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