Outlook For Pakistan-US Ties

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Context

As Afghan reconciliation picks the pace, Pak-US relations are also entering a new phase. From most accounts, matters are beginning to stabilize between the two after a great deal of turbulence in 2011. The change may be related to the shift in US focus towards a political solution to the Afghan conflict. Moreover, both US and Pakistan claim to have the toned down their expectations.

Pakistan has an election scheduled for next year and the US is entering a tumultuous phase related to the fiscal cliff. This means both will be distracted by their domestic politics. Pakistan’s bleak economic outlook makes its difficult to continue the fight against terror with the same vigor. On the other hand, the tight financial situation will make it difficult for the US to be as forthcoming in providing economic and military assistance to Pakistan. These dynamics is what will shape the future of Pak-US Relations in the short term from 1 to 2 years, and in the mid-term from about 4 to 5 years.

Analysis

 

Emerging US Posture    

This changing political and fiscal landscape will shape American policies towards Pakistan and the rest of the world. In it’s 2011 forecast, PoliTact had observed:

“The inter-institutional tussles between the US defense and intelligence organizations and the State Department over the control of US foreign policy are likely to continue. The mixed messages that emanate from Washington, as a result, will be a source of confusion for its allies, on the real intent and policy of the US. This could also complicate the job of the US President as Congress pushes for cuts in defense spending.”

In PoliTact’s estimation, President Obama’s victory in the November election represents a decisive swing in favor of political approaches to major foreign policy issues. This is in stark contrast to the preference for hard power that was the norm in the aftermath of 9/11. However, this does not mean the hardliners will readily admit to the reality. The result of the debate on the fiscal cliff will be another demonstration of how the institutional balances are settling down.

The US Senates decision to block the funding for the creation of a new military intelligence organization paralleling the CIA; is also an example of this move. Although the Senates decision has more to do with managing waste and creating efficiency with in the military guided intelligence apparatus. As US shifts to a lighter footprint around the world, the role, and scope of its intelligence organizations are likely to increase manifold even when the overall military spending decreases.

The crux of the matter is that for the last couple of years, a thorough recalibration of the American threat perceptions has been taking place. While this process still continues, there is a growing realization the war on terror should not distract it from the larger threats posed in the pacific, more specifically by China.

Where Does Pakistan Fit? 

In this context, Pakistan’s role goes beyond just a key player in the war on terror, or in finding a political solution to the Afghan conflict. The country is an influential democratic Islamic state of South and Central Asia that borders China and Iran; two other key headaches of the US.

From an American perspective, if Pakistan can resolve its differences with India and be a part of the Afghan reconciliation, then under the right international conditions it can also move towards restraining Iran. However, Pakistan would like to keep its options open. While it looks forward to benefiting economically from its improving ties with India and maintaining its influence in Afghanistan, Pakistan will not like that to happen at the cost of its ties with Iran and China.

This is similar to how India has played its cards; while it has strategic relations with the US, the country continues to strengthen its defense ties with Russia and widen its trade with China.

During his visit to India, on December 24 Russian President Vladimir Putin signed defense deals worth a total of $4 billion. The leaders of the two countries also held extensive discussions to further cooperation in the field of nuclear energy and to fast forward discussions on cooperation for reactor 3 and 4 in Kudankulam. India and Russia have agreed to increase bilateral trade to $20 billion by 2015.

 

Trading Partners Expected Trade Volume By 2015
   
India-China $100 Billion
India-Russia $20 Billion
India-US $150 Billion
India-Iran $30 Billion (projected before the imposition of sanctions on Iran)
   
Pakistan-China $15 Billion
Pakistan-Russia $600 Million
Pakistan-US $6 to $7 Billion
Pakistan-India $6 to $8 billion
Pakistan-Iran $4 to $5 Billion

 

 

By 2015, trade between India and China is expected to hit $100 billion, as compared to $150 billion between India and US. On the contrary, trade between Pakistan and US is projected to reach $6 to $7 billion during the same time frame, which is close to the trade volume anticipated between India and Pakistan. In other words, US leverage over Pakistan continues to decline. These numbers also explain why Pakistan seeks more US trade than aid. Meanwhile, Pakistan-China trade volume is estimated to hit $15 billion by 2015.

 

 The Future Trajectory

While there is a bilateral tangent to the Pakistan-US ties, the future of the relations between the two is more dependent on the trajectory of US-Iran, US-China, and US-Russian relations.

If the balance starts to tilt more towards competition as oppose to cooperation in the US-China relations, as is expected from the American pivot towards the pacific, Pakistan will most definitely feel the heat.

Pakistan is already under considerable American pressure regarding its improving ties with Iran, especially as it relates to Iran-Pakistan gas pipeline project. Reportedly it was the Indian pressure that caused the postponement of President Putin’s visit to Pakistan in October. As Pakistan-India ties improve, Russia is likely to have a freer hand.

In essence, the centrality of Pakistan in the war against terror and Afghanistan is widely known. However, the nation also holds a fundamental position vis-à-vis other high profile concerns of the US: China, Iran, and increasingly Russia. In the short term, Pakistan US ties are indeed stabilizing, but in the long run Pakistan is gravitating and positioning itself more towards BRICS and SCO. From the point of view of trade, it’s a win-win situation. How the security alliances shape up, is another matter all together.

 

 

 

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