Pakistan can’t afford estrangement in its relations with both Iran and the US

Javid Hussain (Former Ambassador)

Jahangir’s World Times (JWT): How would you elaborate the foreign policy of outgoing PPPP- led regime?

Javid Hussain (JH): I think the foreign policy of the previous regime, despite some variations and nuances, was, in essence, the continuation of the foreign policy pursued by Musharraf. Even a cursory glance at the PPPP policy, in its overall framework as well as regional dimension, vividly manifests that it is a mere continuation of the predecessor. For example, Pakistan’s foreign policy towards US, where Musharraf-set parameters were blindly followed, and same is the case with our policy towards India, Afghanistan and other regional and international players.

JWT: The previous government inaugurated the Iran-Pakistan (IP) gas pipeline project when only some days were left in its departure; most analysts opine that this would be the biggest foreign policy challenge for the upcoming government. How do you see this situation?

JH: Yes, it will be an enormous challenge without any doubt. First of all, I would say that the pipeline is in the mutual interest of both the countries as Iran is one of the major gas exporters and it has the second largest gas reserves after Russia. Pakistan also needs gas because domestic reserves are depleting fast and at the moment, we have to import gas either through pipeline or in form of LNG. In this context, Iran is the best choice apparently. Much-trumpeted TAPI gas pipeline is somewhat infeasible owing to the long distance and ongoing turmoil in Afghanistan.

Now, I would expound the project’s possibility of being the Achilles’ heel of the next government. Actually, the estranged US-Iran relations make it a daunting challenge. The US is going to use all the available options to pressurize Pakistan and halt the project. For instance, US can stop its development or security aid to Pakistan or influence the institutions like IMF and the World Bank to subdue Pakistan. Pakistan can also be subject to UN or American sanctions. In my opinion, this right decision should have been taken earlier. Now, the next government will have to deal with the American pressure and remember Pakistan can’t afford estrangement in its relations with both Iran and the US because Iran is our neighbour as well as an important regional player while, on the other hand, the US is a superpower. We cannot alienate Iran for the sake of US and vice versa.

JWT: Pakistan is of utmost importance to the US in wake of its drawdown from Afghanistan in 2014. Don’t you think that our negotiators should leverage their position to tackle the pipeline challenge?

JH: Definitely, I agree. That’s why I am saying that it’s up to the new government and our negotiators that how they use the leverages to counter the US pressure. The all-important role of Pakistan in the process of US drawdown is one such leverage. It’s in our hands to use it effectively to counter the US pressure. But, at the same time, we need to be very cautious while using it. Pakistan, indubitably, provides the most cost effective and shortest route for the withdrawal of Nato forces but the option of northern route, though costly, is still available to US. But hopefully, our negotiators will strike a good deal for Pakistan.

JWT: There have been a lot of fuss across Pakistan about the MFN status to India but the previous government couldn’t implement it. Is it an outcome of a tussle between some ministries? 

JH: Well, for this, I will blame the Commerce ministry because they hadn’t done their homework. That’s the reason, when the time came to implement the decision, there were stiff resistance from some sectors. Therefore, it stalled the whole process and, in my opinion, it is going to be another foreign policy challenge for the new government as the grant of MFN status is an obligation of every member of World Trade Organization (WTO). Actually, our objective should be to facilitate Pak-India trade on a level-playing field; in fact, the businessmen of either side should have equal opportunities to carry on the trade.

JWT: What, in your view, are the most important economic challenges before the new government?

JH: Well, in case of economy, the list is very long; the reason being that our economy is in a tumultuous situation because of the mismanagement on part of the previous regime. I would highlight a few challenges for your readers. First of all, our GDP growth has dropped too much and according to the present regional trends, our economy is performing very poorly. In order to increase the GDP growth rate, we have to raise the investment rate and presently, our investment to GDP ratio is about 12 to 13% which should have been at least 20% to generate 6 to 7% growth of our economy per annum. Moreover, our national savings rate is hardly about 10 or 11%, so we also have to raise our saving rate in order to attract more investment. Our public finances are in a terrible shape as well. Our deficit financing rate is very high; expenditures exceed the revenues of the government. Therefore, to increase the revenue, the new government not only has to curtail expenditures but has to widen the tax base as well.