The Correlation Between Pakistan’s Threat Perception And Regional Economics



As the US withdrawal from Afghanistan slated for late 2014 approaches, the politics of South and Central Asia is entering a particularly peculiar stage. Aside from the recent incidents on the Line of Control (LoC), matters appeared to be lining up as it relates to traditionally tense Pakistan-India ties. Until the full release of Pakistan’s new doctrine, there will remain ambiguity about the thrust of its new threat perception. On the surface, it seems like the consistent and exhaustive US lobbying has ultimately produced dividends, with the country changing its focus from external to internal enemies. Admiral Mullen will be happy to learn that his numerous late night discussions with General Kayani were not all in vain.

With the Afghan reconciliation picking the pace, Pakistan also appears to have dropped the good and bad Taliban classification. Evidently, the elimination of Mullah Nazir in a recent drone strike was an outcome of this shift. It is too early to tell how this tectonic change and the reaction to it will manifest across the country. Nonetheless, even if Pakistan’s ties with Afghanistan, India, and the US stabilize, the conflict over Iran can undo these gains.


Security and Economics

As Pakistan implements its new security doctrine, the incidents over the disputed LoC are already demonstrating how challenging the ground reality is. It is mainly because in today’s interconnected world matters are neither fully a consequence of external circumstances nor wholly internal. They lie somewhere in the middle. Philosophically put, any given entity has its internal set of properties, but these characteristics are usually shaped by constant interaction with the surrounding environment.

Pakistan’s challenges are multifaceted; not only has the balance between the internal good and bad elements changed, there is no shortage of external threats either.

The shift in Pakistan’s threat perception is probably based on a close examination of the interplay of political, economic and security interests. For example, in the case of India, the argument is that the economic benefits of normalized ties can help overcome the contentious issues between the two, and prevent Afghanistan from becoming a proxy battleground. In the larger framework, Pakistan can help India look West for the energy resources, and in turn, it can be a bridge for Pakistan’s Look-East policy. Reportedly, it was the Indian pressure that caused the postponement of President Putin’s visit to Pakistan in October 2012. As Pakistan-India ties improve, it would be easier for Russia to move closer to Pakistan.

The model in this regard can be the India-China ties. While the two countries are competitors geopolitically, by 2015, trade between India and China is expected to hit $100 billion. On the other hand, the trade volume between US and India is estimated to reach $150 billion during the same time frame.

Can India-Pakistan Cooperate and Compete?

So, can Pakistan and India compete and cooperate like the other players. The answer depends on a few other variables. For instance, the interconnection of ties between Pakistan, US, and China, including the interplay of relations between China, US and Russia on matters like Iran and Syria.

To cooperate, India and Pakistan will have to look at the region from an entirely different lens. Even if Pakistan normalizes its ties with India and Afghanistan stabilizes, the situation of Iran can spill over and spoil the regional economic and security gains. Moreover, if the balance starts to tilt more towards competition, as opposed to cooperation in the US-China relations, as is expected from the American pivot towards the Pacific, Pakistan-India ties will be impacted as well. Pakistan is already under considerable American pressure on its improving ties with Iran, especially as it relates to Iran-Pakistan (IP) gas pipeline project.

The Balancing Act and Regionalism

If tension over Iran’s nuclear program escalates further, Pakistan and India will be both caught balancing their economic, political and security ties between the Gulf States and NATO, on the one hand, and China and Russia on the other. To some extent, this is already occurring. There is a great deal of similarity between the stances both have adopted on the recent crises in the Middle East, ie non-intervention and safeguarding the sovereignty and integrity of the states involved. With the exceptional case of Syria, Turkey’s position has also been close to Pakistan and India.

If we consider the economic computations, it is not going to be an easy task for these states.

According to public sources, in the fiscal year 2012-13, Pakistan’s remittances from the Gulf region are expected to reach $10 billion, which constitute about 61% of its total remittances. Its remittances from Saudi Arabia alone stood at $3.68 billion during 2011-12. Based on an interview that Pakistan’s ambassador to UAE Jamil Ahmed Khan gave to Khaleej Times in 2011, the volume of Pakistan’s trade with GCC is expected to increase from $59 billion to $350 billion by the year 2020. However, trade volume between Pakistan and Iran is presently quite low and is estimated to reach $5 billion by 2015. This obviously will change if IP project is factored in.

On the other hand, before the imposition of sanctions, India’s trade with Iran was projected to reach $30 billion, while its business with the Gulf Cooperation Council (GCC) is expected to hit $150 billion in 2012-13. In the case of Turkey, in the next five years, its economic dealings with Iran are estimated to approach $30 billion despite US sanctions, and its trade with the Arab world will be around $130 billion.

In addition to the energy corridors, these states have also attempted to build infrastructure links with each other, but due to American, Arab and Israeli concern over Iran’s nuclear program, they have had limited success.

In November 2009, Pakistan and Turkey signed the Preferential Trade Agreement (PTA). At that time, the trial operation of a freight train service had also commenced, connecting Pakistan and Turkey via Iran. The train service is 6,506 kilometers long, 1,900 km of which passes through Pakistan, 2,570 km through Iran, and 2,036 km through Turkey. At an event held at the Washington-based Atlantic Council on January 9th, former Afghan ambassador to US Said Jawad commented that in addition to the energy network, Afghanistan also desires to link-up with the widening train network. He conveyed concern about the risk associated with Afghanistan’s southern access points through Iran and Pakistan. To counter this, the country is working to improve its access and integration to the north with the Central Asian republics.


Pakistan, India, and Turkey thus have a key diplomatic role to play in preventing Iranian tensions to escalate any further, which can jeopardize their attempts to delicately juggle the political, security and economic interests. With Europe and North America in recession, any disability in the Gulf region will have a negative impact on the growth trajectory of India and Turkey. More than economics, for Pakistan, the consequences will be felt in terms of ethnic strife, which is already spreading throughout the country.

In this context, with Pakistan’s surroundings in turmoil, it will be extremely difficult to stabilize the country internally. The situation of Middle East is another example of this point. The Arab Spring now has spread to many other countries, and even the stable and rich Gulf States are worried about the future of the phenomena.

Moreover, the Iran crisis will put to test the mantra that economic dealings and interdependence can over time resolve political conflicts. If Iran crisis worsens, the message for the region will be: avoid economic dealings before resolving security concerns and political conflicts.

(Note: A version of this article also appeared in The Friday Times)

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