An article by: Ahmed Moustafa

Pakistan is at the center of the geopolitical interests of both the West and the East. The country's proximity to conflict zones and geopolitical instability have made it highly vulnerable to outside influences. The International Monetary Fund has had a significant impact on Pakistan's economy. Western countries, particularly the United States, constantly put pressure on Pakistan because of problems in combating terrorism and extremism.

Pakistan’s strategic location at the intersection of South Asia, Central Asia, and the Middle East has historically been a gateway for trade, cultural interactions, and people movement. However, its proximity to conflict zones and geopolitical landscape has made it susceptible to instability and security threats. Pakistan’s strategic position has allowed it access to major trade routes like the Silk Road and the Grand Trunk Road, contributing to its economic progress. It has also played a significant role in regional and global affairs, holding non-permanent seats on the Security Council and actively participating in organizations like SAARC and OIC. However, Pakistan’s location has also presented challenges, including conflicts with India over the disputed Kashmir region and internal security threats like terrorism and insurgency. The country’s proximity to Afghanistan has made it a frontline state in the battle against terrorism and extremism, hindering its stability and economic growth. Despite these challenges, Pakistan’s extensive coastline and access to the Arabian Sea offer opportunities for maritime power and new energy sources. By capitalizing on these opportunities and addressing the challenges posed by its location, Pakistan can pave the way for a brighter future.

Tensions between Pakistan and the International Monetary Fund

The International Monetary Fund (IMF) has played a significant role in shaping the economic trajectory of Pakistan, Egypt, and Turkey by providing financial assistance in the form of loans and grants. These loans have had both positive and negative impacts on the respective economies.

On the one hand, IMF loans have contributed to stabilizing the economy, controlling inflation, and addressing balance-of-payment crises. They have also facilitated the implementation of economic reforms aimed at improving fiscal discipline and enhancing economic growth.

On the other hand, IMF policies have often come with stringent conditions, including austerity measures and structural adjustments. These conditions have resulted in short-term economic hardships, reduced social spending, and increased unemployment.

The current economic crisis in Pakistan has brought the IMF’s influence and impact into sharper focus. Factors such as political instability, fiscal mismanagement, and global economic challenges have contributed to Pakistan’s economic woes. In response, the Pakistani government has sought IMF assistance, which has come with a set of strict conditions and reforms.

These conditions include cutting government spending, increasing taxes, and raising interest rates. While these measures are intended to stabilize the economy, reduce inflation, and restore confidence in the Pakistani rupee, they have also had significant social and economic consequences.

Reductions in government spending have resulted in cuts to public services like healthcare and education. Tax increases have placed a heavier burden on ordinary citizens, particularly the poor. Additionally, higher interest rates have made borrowing more expensive for businesses, leading to a slowdown in economic growth.

The future of Pakistan’s economy hinges on the ongoing negotiations between the country and the IMF. Successfully implementing the agreed-upon reforms and meeting the IMF’s conditions could open doors for additional financial assistance and pave the way for economic recovery. Conversely, failing to meet the IMF’s demands could lead to even greater economic hardships for Pakistan in the coming years.

Children carrying fertile sand from the bank of Ravi river, in Lahore, Pakistan

Pakistan as one of the biggest Muslim countries is vulnerable to pressures from the West

Pakistan has been under significant pressure from Western nations, particularly the United States, due to concerns about terrorism and extremism. Since the 9/11 attacks, Pakistan has been a key ally in the US-led war against terrorism. However, there are concerns about Pakistan’s perceived lack of cooperation in combating extremist groups, leading to strained relations between the two countries. Western governments have accused Pakistan of providing safe havens for terrorists and not taking sufficient action to dismantle terrorist networks within its borders. The presence of groups like the Taliban and Haqqani network in Pakistan’s tribal areas has been a major point of contention.

Western governments have consistently urged Pakistan to take more aggressive measures against these groups, while Pakistan maintains that it is already doing its best to combat terrorism while dealing with its own internal and regional security challenges. The pressure from the West has included withholding aid and military assistance, which has hurt Pakistan’s economy and its ability to effectively address the terrorism threat. Despite these concerns, Pakistan continues to play a crucial role in promoting regional stability and cooperation.

Pakistan faces immense pressure from the West to align with its geopolitical interests while preserving its regional relationships. Led by the United States, the West has long considered Pakistan a crucial ally in the “war on terror” and exerted significant influence over the country’s policies. Pakistan’s complex regional dynamics, including its close ties with China and rivalry with India, make it challenging to balance these external pressures. Striking a balance is crucial for Pakistan’s stability and long-term prosperity, but it is a challenging path that tests the country’s diplomatic skills and strategic resilience.

The Recent Visit of Raisi to Islamabad and the significance thereof

Iran’s newly elected President, Ebrahim Raisi, recently visited Islamabad, Pakistan, marking the second time he has visited the country. The visit aimed to strengthen bilateral ties between Iran and Pakistan, reaffirming their mutual commitment to enhance cooperation in sectors such as trade, energy, infrastructure, and security. Iran and Pakistan agreed to establish a joint commission to facilitate regular consultations and coordinate joint projects.

The visit also aimed to bolster regional stability by engaging in discussions on regional security challenges, particularly the situation in Afghanistan. Both countries share common interests in Afghanistan and emphasize the importance of regional peace and stability. They expressed support for an inclusive Afghan government that represents all ethnic groups.

Iran and Pakistan have long sought to expand economic cooperation, and the visit served as a platform to explore new avenues for trade and investment. The Pakistan-Iran gas pipeline, also known as the Peace Pipeline, is a long-term project between Tehran and Islamabad that has suffered delays and financial issues for numerous years. The pipeline will carry natural gas from Iran to neighboring Pakistan. As a result, Iran and Pakistan signed agreements aimed at increasing bilateral trade and facilitating cross-border investment.

Lastly, the visit addressed the issue of countering terrorism. Both leaders Raisi and Sharif agreed to cooperate in combating extremism and violence, recognizing the need for joint efforts to eliminate terrorist sanctuaries and cut off their sources of financing.

The visit signifies a positive advancement in relations between Iran and Pakistan, highlighting their mutual aspiration for enhanced cooperation, regional stability, and economic progress. It has laid the groundwork for future high-level engagements and emphasizes the significance of sustained dialogue between these neighboring countries according to their membership in OIC, SCO, and D8.

In their recent meeting, Iranian President Ebrahim Raisi and Pakistani Prime Minister Shehbaz Sharif engaged in extensive discussions encompassing various critical issues. A key focus was the escalating crisis in Gaza, with both leaders condemning Israeli aggression and calling for an end to the unjust blockade and the establishment of an independent Palestinian state.

Summit in Islamabad between Sharif e Raisi

The Current Situation between Pakistan and India and the Hindu Nationalism issue with the Indian PM Modi

The Kashmir conflict, a longstanding issue originating from the partition of British India in 1947, has significantly influenced the relationship between Pakistan and India. The Kashmir conflict, centered around territorial disputes in the Himalayan region, has led to multiple conflicts, political and military strains, and a hostile environment. Cross-border terrorism, supported by various militant groups, further complicates their bilateral relations. Religious disparities, with Pakistan being predominantly Muslim and India predominantly Hindu, have contributed to the underlying tensions.

The surge of Hindu nationalism in India has resulted in increased division and violence, particularly between Hindus and Muslims. This has led to a climate of apprehension and distrust within the Muslim community in India, with some feeling marginalized and targeted. In 2019, the Modi government passed the Citizenship Amendment Act (CAA), which reinforced the perception of discrimination against Muslims. Pakistan, a predominantly Muslim country, has expressed concerns about the rise of Hindu nationalism and its potential impact on regional stability.

The strained relationship between India and Pakistan, fueled by Hindu nationalist rhetoric and policies, has hindered efforts to resolve long-standing disputes, including the ongoing Kashmir conflict. Pakistan strongly condemned India’s revocation of Article 370, which stripped the former state of Jammu and Kashmir of its special status, further intensifying the already heightened tensions.

The Kashmir dispute holds significant implications for regional stability and Pakistan-India relations. Since their independence in 1947, it has resulted in two wars, numerous smaller clashes, and skirmishes. The Anglo-Saxons have played a crucial role in moderating the Kashmir dispute, providing economic assistance, and facilitating peace talks between the two nations. However, they have faced accusations of favoring India and not exerting enough pressure on Pakistan to resolve the dispute.

The Kashmir dispute has serious implications for regional stability, destabilizing the entire region, and potentially triggering an arms race between the two countries. It has poisoned relations between the two countries, making it challenging for them to collaborate on other important matters such as trade and economic development.

Protests in India against Pakistan

Conclusions

In conclusion, Pakistan’s strategic location at the crossroads of South Asia, Central Asia, and the Middle East has historically been a hub for trade, cultural exchange, and people movement. However, its proximity to conflict zones and geopolitical instability has made it vulnerable. The International Monetary Fund has significantly influenced the economies of Pakistan, Egypt, and Turkey through loans and grants. Western nations, particularly the US, have pressured Pakistan due to terrorism and extremism concerns. Pakistan has been a key ally in the US-led war against terrorism since 9/11, but there are concerns about its perceived lack of cooperation in combating extremist groups. Recently, Iran’s President, Ebrahim Raisi, visited Pakistan to strengthen bilateral ties and reaffirm their commitment to cooperation in sectors like trade, energy, infrastructure, and security. The rise of Hindu nationalism in India has led to increased division and violence, particularly between Hindus and Muslims. Pakistan, a predominantly Muslim country, has expressed concerns about this and its potential impact on regional stability.

Director of the Center for Asia Studies

Ahmed Moustafa