Asia - Pacific

'Pakistan economy to suffer if Afghan peace talks fail'

Islamabad's policy shift from geopolitics to geoeconomics can cost country economically, expert warns

Islamuddin Sajid   | 27.04.2021
'Pakistan economy to suffer if Afghan peace talks fail'


Pakistan could face a major economic blow if peace talks between the Taliban and the Afghan government fail, an expert warned.

Speaking at a webinar by the Islamabad Institute of Conflict Resolution, an Islamabad-based think tank, late Monday, Zafar Moeen Nasir, former vice-chancellor of Punjab University, said the country's policy shift from geopolitics to geoeconomics could cost Pakistan economically.

"As the withdrawal of US forces is near and clouds of civil war are looming there which is going to create tremendous security risks (for Pakistan), any civil war can be a setback for economic conditions in Pakistan," he said.

He was referring to the post-withdrawal situation in Afghanistan if the US pulls out without a sustainable peace deal between Kabul and the insurgents.

Pakistan has been one of Afghanistan's largest trading partners, but several internal and external factors have led to a drop in trade in recent years. Both countries share a 2,430-kilometer-long (1,510-mile) border, and border crossings are the main trading routes.

"America has also realized that Pakistan can play both, positive as well as the negative role, after its forces' withdrawal from Afghanistan. Now it depends on Pakistan's policymakers how to tackle the Afghanistan issue as Pakistan has already shifted towards geo-economics, so Pakistan will focus more on the economic outcome rather than geopolitical gains," Nasir said.

He added that a constructive role in Afghanistan by Pakistan will bring dividends for both nations.

US, China tension

The speaker also spoke on the current ongoing tension between Washington and Beijing and said Pakistan cannot take a risk to take sides in this "new cold war".

"This is a complex situation for Pakistan to make choice as Pakistan was a friend to America but now very close to China," Nasir explained.

A defense analyst believed that the distance between Islamabad and Washington was created by the latter's opposition to the multi-billion dollar China-Pakistan Economic Corridor (CPEC).

"The US is not our enemy, it has been a friend, but a matter of concern for us is only the US' blatant opposition to the CPEC which must try and make them understand that it is our need," said retired Maj. Gen. Raza Muhammad, an adviser at the National Defense University.

He added that the recent deal between China and Iran will also bring positive progress in the region.

"There is a great possibility of regional connectivity, not only the regional connectivity, ultimately it is the Eurasian connectivity, and then it is going to become the Afro-Asian connectivity and global connectivity as Pakistan is already very strongly pursuing its goals and objectives and despite all opposition to the CPEC," he argued and termed the CPEC a game-changer for the country's future.

The $64 billion CPEC – a network of roads, railways, and pipelines – aims to connect China's strategically important northwestern Xinxiang province to the port of Gwadar in Balochistan.

The speakers including Sameera Imran, assistant professor at National Defense University; Faheem Sardar, Islamabad-based economic analyst; and Sabah Aslam, head of Islamabad Institute of Conflict Resolution, also suggested Islamabad to enhance its trade relations with Central Asian states, neighbors, and beyond.

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