From rhetoric to reality

The unfinished shift to geoeconomics

Pakistan’s idea of geoeconomics is closely linked to long-term internal and external strategic and economic stability. Historically, Pakistan’s strategic thinking has centered on security and survival against a perceived adversary— India. This approach attracted security-driven aid and external support from strategic opportunists, ultimately limiting Pakistan’s autonomy in decision-making.

Even today, Pakistan’s economic policies remain influenced by security anxieties, restricting its ability to view foreign policy through broader economic lenses. Although debates occasionally emerge about reallocating GDP from defense to development sectors, such discussions rarely translate into structural reform. While the National Security Policy (NSP) 2021 explicitly emphasized a shift toward geoeconomics, in practice, this transition remains largely rhetorical.

This security-driven approach has constrained internal prosperity, contributing to instability, economic burdens, and the marginalization of human welfare and education. The persistence of traditional strategic behaviour has fueled policy debates advocating a shift from a security-dominated model to a more pragmatic, economically oriented framework.

The ongoing “Asianization” of global politics is increasingly shaped by trade wars, tariffs, strategic partnerships, and economic interdependence. Such interdependence has constrained the escalation of several conflicts. For instance, the India–China dispute and the US–China trade war have not evolved into full-scale military confrontations, partly due to economic entanglement.

Pakistan’s need to secure regional connectivity is therefore closely tied to evolving global power politics and the growing role of middle powers. Yet despite recognizing this shift, Pakistan continues to operate within a geopolitical competition framework rather than fully pursuing geoeconomic integration, largely because of its persistent security dilemma.

Aligning bureaucratic and legislative priorities would prove more effective in attracting serious investors than policy declarations alone. A coherent public diplomacy strategy could also help ease tensions with Afghanistan and Iran by reinforcing economic interdependence.

Recently, while facing both internal and external pressures, Pakistan has used CPEC as a platform to broaden its outlook beyond China. To mitigate economic vulnerabilities, hedging between the USA and China appears increasingly necessary to maintain relevance in both geoeconomic and geopolitical arenas, particularly amid tariffs and trade competition. These global shifts make Pakistan’s transition toward geoeconomics even more urgent.

The contemporary global order is increasingly driven by economic competition, resource politics, and mineral diplomacy. In response, Pakistan has begun seeking diversified partnerships, particularly within Asia, rather than aligning exclusively with either the USA or China.

Trade alliances strengthened through CPEC could enable Pakistan to leverage Iran’s energy potential, Afghanistan’s connectivity aspirations, and Central Asia’s need for access to sea routes. An interdependence-based approach could reduce regional instability while enhancing economic integration.

However, Pakistan’s longstanding pursuit of strategic stability has consistently overshadowed the development of durable economic structures. This pattern is not new. Earlier geoeconomic initiatives— such as the Pakistan–Iran–India gas pipeline, often labeled the “peace pipeline”— failed to materialize because security concerns and geopolitical pressures outweighed economic cooperation.

An India-centric foreign policy orientation has been reinforced by institutional preferences and political populism. Policymakers have often prioritized crisis management in response to perceived threats rather than developing long-term cooperative strategies attractive to regional stakeholders.

Pakistan’s strategic location remains central to both its internal and external stability. To capitalize on this advantage, the country must adopt a posture centered on regional connectivity and economic interdependence rather than confining such ambitions to rhetorical commitments.

In an era defined by trade competition and economic diplomacy, Pakistan must realign its policy structures and institutional incentives to support geoeconomic objectives. Rather than expending political capital on recurring regional confrontations and temporary truces, greater emphasis should be placed on strengthening economic diplomacy, integrating regional markets, and enhancing trade connectivity.

The geoeconomic discourse must be supported by practical measures to attract foreign investment and demonstrate policy credibility. Establishing institutional infrastructure dedicated to trade facilitation, investment promotion, and regulatory reform is essential. Even incremental reforms could reduce reliance on IMF programs and external aid.

Aligning bureaucratic and legislative priorities would prove more effective in attracting serious investors than policy declarations alone. A coherent public diplomacy strategy could also help ease tensions with Afghanistan and Iran by reinforcing economic interdependence.

Ultimately, a genuine geoeconomic orientation could reduce Pakistan’s vulnerability to coercive diplomacy and help recalibrate its foreign relations on a more balanced footing. Unless Pakistan aligns its strategic behavior with its geoeconomic ambitions, the promise of transformation will remain aspirational rather than operational.