Geo-Politics to Geo-Economics with Special Reference to Pakistan

There is always manoeuvring in the international chessboard. The geo-economics has gained ascendancy over geo-politics. Geo-economics was considered essential if the United States was to become and think like a global power. Attack on Afghanistan, and War against Iraq are supposed to be systematic attempts of US for upholding of its much need economic dominance. Due to its strong geo-economic might the Great Britain was successful to dominate the world in 19th century. It is predicted that 21st century will be a century of economic warfare.

Columnist Mehmood-Ul-Hassan Khan examines the nexus between the two with respect to Pakistan.

Local investors have lost more than Rs. 50 to 65 billion in the continued crashing of stock exchanges and saga continues. Due to bitter geo-political and geo-strategic emerging trends people are busy to withdraw million of dollars from the domestic banks throughout the country. The widespread fear of war against Iraq is also posing sentiments of uncertainty among the local and foreign investors and ultimately is creating serious short-term threats to economy of Pakistan. The latest beginning of new arms race in the region (India, Pakistan) is also giving tough time to economy of Pakistan because it is very fund consuming futile exercise. The latest new “Afghanistan trade routes beyond Pakistan” are also eye-opener for the policy-makers and economic managers of Pakistan. The imposition of Immigration and Naturalisation Service [INS] rules, latest controversial statement given by the US Ambassador to Pakistan Nancy Powell to stop LoC infiltration and furthermore, strict warning not to use its soil for the global activities of terrorism are some hidden part of new compulsion of New World Order which may disturb the socio-economic priorities of the elected government.
The geo-economics reflects the interdependence of global and national economies, but in recent times the shape of global political arrangements have been affected primarily by economic considerations. Pakistan was granted lavish foreign aids in 1980s in the fight against former USSR, which was supposed, too vital for far-reaching geo-economics and geo-strategics/politics interests of USA. Again in 2002 Pakistan was important player in the fight against terrorism and became the darling of the West and received handsome foreign aids. But with the passage of time and emerging geo-political and geo-economics bitter ground realties within the region (Asia, Central Asia, Middle East, Europe) Pakistan has been pushed back by the conflicting philosophies of “Give and Take”.
It is great that our national foreign reserve has reached $ 9.64 billion. It is also true that we have reduced our external debt by $2 billion. But it is also reality that now Pakistan is passing through very difficult phase of its history since 1971. The imminent war against Iraq would definitely increase the war surcharge, freight charges, cancellation of export orders, shortage of oil, return of hundred of thousand workers from the whole Middle East and decrease in foreign remittances. Pakistan is bearing extra $1 billion in oil import bill due to uncertainty in the region and war against Iraq. The international media is projecting Pakistan as “Next Prey of US” which is also creating ambiguity among the ranks of many multinational companies and potential foreign investors forced them to stay away from Pakistan. It is predicted that though time is ahead in the days to come, Pakistan’s economy is on the “Road to Recovery” and cannot afford any arms race and uncertainty in the region.
Geo-politics these days is being increasingly replaced by geo-economics as a measure to gain sustainable national strength. Negotiations through economic dialogue are the latest motto/resort replacing military conflicts around the globe. By having strong economic bonds of mutual interest, by virtue of which Pakistan can reduce tensions on its borders and gradually normalize its relationships with its neighbours. Pakistan can use its national treasures and resources on economic development and well being of the general masses rather than using it on arms collection. Economic issues play a dominant role in all inter-and-intra-state relations. Around the globe more and more conflicts are emerging/developing within states and also among different nations on the issue of monopoly of economic resources. The Soviet Union broke up because they had ample security but no food and purchasing power. Economic power is the cornerstone of a nation’s power. Pakistan must improve its economic performance, both quantitatively and qualitatively, to improve its socio-politics and geo-strategic profiles. The developed world is no longer willing to extend special and differential treatment to developing countries because world has completely changed after the incidence of 9/11. Sustained high, equitable and balanced economic growth combined with internal continued political stability, peaceful relations with neighbours and other major economic and strategic partners will enable Pakistan to safeguard its socio-economic goals and strategic assets.
The firing/testing of Ghouri missile matched with series of missile tests i.e. Akash, Agni, Brahmos and a supersonic missile caused an immediate security risk and severe economic strains because Pakistan has to match with the military might of India in order to secure its short and long term socio-economic goals and strategic assets. India has spent $13.7 billion in the past twelve months on defence projects and recently has finalized arms deal of $17 billion with USSR. The advent/threat of nuclear weapons further accentuated the importance of geo-strategic compulsions within security milieus and revival of quick economic revival is seemed to be delay due to undesirable arms race in the region. According to one report Pakistan has spent $100 billion in 54 years on defence projects, which is supposed to be huge amount. The proxy war between India and Pakistan is costing a lot more in terms of development and progress than India. India’s annual defence spending, over the last 50 years, has averaged about 2.5% of GDP, whereas Pakistan’s annual military spending during the last 50 years has averaged about 6% of GDP. Pakistan’s defence spending has averaged 6% per year over the last 54 years. The excess defence spending of 3% per year adds up to 162% of GDP (54 years * 3%). Pakistan’s total debt is around $60 billion and we are paying Rs.300 billion per year in debt servicing. Had we spent prudently on military, Pakistan would have a manageable debt today of say $30 billion and could have afforded to spend an extra $70 billion on its people. Excessive defence spending at the expense of economic progress and prosperity leaves people deprived and frustrated, resulting in ethnic and social unrest and Pakistan is no exemption. Recently, Pakistan has hit Indian spy plane, due to which the Karachi Stock Exchange has been crashed and investors had to bear heavily.
It is quite possible that we can check India’s military hegemony by our nuclear capability, but how can we match with the permanent economic hegemony of India. India’s economy, population and land are 7-8 times that of Pakistan. Its GDP is 11th largest in the world and yet we have been trying for the past 54 years to match India’s military might. It is lesson of recent history that the nuclear arsenals could not save the Soviet Union from collapsing because its economy stagnated behind the iron curtain. The Soviet people were deprived of even the basic necessities such as clean air, drinking water, education, food and job opportunities in the name of national security. As a result of excessive military spending, the former Soviet Union, like Pakistan, had to borrow heavily to meet its expenses, and fell in the debt trap. Finally, the economy collapsed under the pressure of excessive debt and defence spending and the Soviet Union broke up in many pieces. The largest army of the world with its 30,000 nuclear bombs could not save the country from breaking up.
Chinese defence spending was reduced from 15% of the budget in the early 1980s to 8% by 1989, and has been kept at about the same levels since then. The proportion of China’s defence industrial output ordained for the civilian market increased from 7% in 1975 to about 75% at present. China did it so having the former Soviet Union and India as hostile neighbours. China would not meet that fate because its economy is making up in years what it lost in decades of isolation. It is suggested that Pakistan should follow the example of China and not that of the Soviet Union.
It is predicted and manipulated that twenty-first century will be a century of economic warfare all major power blocs have been reducing political confrontations and moving towards trade-cum-commercial groupings. The whole concept of power based on military might is undergoing a change. Today, economic tools of policy have become more available whereas the military instruments of policy have become more costly and risky. It is now reality that the basis of international relations has shifted from geo-politics to geo-economics. The emergence of a global economy with growth of world trade and spread of foreign investments in the international markets coupled with the production of innovative electronics and the revolution in communication technology show that there has been a clear shift in the mechanism and importance of international affairs from politics to economics. France and Germany had been sworn enemies but now both are determined to bury that bloody past.
Pakistan is not the only country in the world that has a territorial quarrel with another country. Turkey has a territorial dispute with Greece, India and China has a land dispute, Russia and Japan has a 60-year old land dispute over certain islands. China’s land dispute over Hong Kong and Taiwan is well known. England and Spain have a land dispute over Gibraltar and there are dozens of other such cases. But these countries have sacrificed their economic and human development by diverting huge sums to defence. To stop our country from further deterioration and disintegration we need to do the same.
Maladjustment/misconceptions in international relations breed timidity, anxiety, and discord, which in turn spill over in acts of terror, armed interventions of varying magnitudes and ever-escalating casualties, in direct proportion to innovative skill man has acquired in annihilating mankind by acquiring weapons of mass destruction. The strong geo-economics is the total preservation of our political and social well-being, the inviolability of our territorial boundaries, and the maintenance of national interests. A realistic and comprehensive approach to national security, therefore, includes economic strength, internal cohesion and technological capability besides the strategic aspects.
Geo-strategic conditions are changing day by day and posing internal adjustments and external compulsions posing threats to our national sovereignty. The INS] rules, is seemed to be logical reactions of US establishment against the rule of MMA in NWFP, and Balochistan and recent so-called advice (threat) of US ambassador Nancy Powell is first step towards cornering of Pakistan and get desirable geo-strategic goals, and designs in the days to come. The short-term implication of INS rule is very clear which may decrease foreign remittances from USA, cancellation of export orders, debarment of so-called huge market for textile products (USA). It is roughly estimated that about 150,000 to 200,000 Pakistanis will be affected adversely as a consequence of the registration drive launched by the US immigration authorities.
A sudden influx of such a large number of work-force looking for jobs in a country where the rate of unemployment is already precariously high would certainly add to its economic distress and will increase the ratios of poverty. According to the latest report primary commodities export has been down by over 18.64% due to prolong geo-strategic saga in the region and issue of INFs rules has decreased the inward remittances from USA in the country. The recent visit of Commander US Central Command General Tommy R. Franks before the scheduled visit of Gen. Pervaiz Musharraf the President of Pakistan to USSR is also creating fears among the ranks of general people and is disturbing the bright prospects of economic development.
The Iranian President is in India in these days to finalize its multidimensional socio-economic and geo-strategic agreements with India. It is another indication of sentiments of dissatisfaction (major policy shift) between Pakistan and Iran. There would be some severe socio-economic implications created due to that particular policy shift of Iran in the region and policy makers should think about the consequences of that move of “Closer Step For Friendship” of Iran towards India. India and Iran have also signed a Memorandum of Understanding to build a railroad from Chabahar linking it to the Iranian railway network up country and to the Afghan border. Iranian officials said they wanted to develop Chabahar as the major port for Afghanistan and Central Asia, while reserving the port of Bandar Abbas for trade with Russia and Europe. ‘Chabahar opens up Central Asia to the Gulf and Afghanistan becomes the hub’.
Due to latest rapidly changing geo-strategic and geo-political scenarios in the region and around the globe, Afghanistan is also going opposite direction in recent times due to imbalanced policy of the government. Now President Hamid Karzai has made with regional countries other than Pakistan has tied up trade deals with Iran, India and the Central Asian states, which give major concessions to Afghan goods. It is manipulated that due to the latent ambiguity of Pakistan’s policy towards Kabul, promising both aid and trade to bolster the Karzai regime while at the same time allowing others to undermine it by keeping senior Taliban leaders and renegades such as Gulbuddin Hikmetyar and Jalaluddin Haqqani under protection in the tribal belt. Iran will provide electricity to western Afghanistan and meet the 16.5 million US dollar cost of the project, while Iran and Turkmenistan will also provide natural gas to Herat city.
Regional competition over trade routes is defining the strategic priorities for the Afghan government, as well as creating a new geo-political map in the region and unless Pakistan’s military develops a clear-cut strategy of goodwill towards Kabul, Islamabad is likely to lose out in the competition to build trade routes with Central Asia and maximum utilization of Godar port and proper execution of Afghan Trans Trade System. In early January, Kazemi signed a deal with Iran that will give Afghan exporters the right to use the port of Chabahar with a 90% discount on port fees, a 50% discount on warehousing charges while Afghan vehicles would be allowed full transit rights on the Iranian road system. On January 6, at another meeting in Tehran, India, Iran and Afghanistan signed an agreement to give Indian goods heading for Central Asia and Afghanistan similar preferential treatment and tariff reductions at Chabahar, while India agreed to finance the upgrading of the road between the port and the Afghan border.

Conclusion
Sentiments have no values in the international politics. Only hidden economic needs dominate the whole scenarios. In the domestic politics we always follow the theory of “Power’s Pendulum”. We are ever ready to compromise domestically with each other i.e. (ML (Q) with PPPP, MMA with ML (N) or MQM) then why not we should go for mutual compromises/understandings with our neighbours. There is immediate need for complete overhauling in our national socio-economic goals, streamlining of foreign policy (affiliation with only one i.e. USA), realization of ground realities, and U turn form Isolation to active participation. Pakistan should have cordial bilateral relationships with USSR in order to create power equilibrium in the region. It is predicted/feared that Pakistan is being punished for five reasons; it an nuclear power, it is an Islamic country, it is close ally of China, it is against the expansionist engagements of India and Israel, and the last but not the least Pakistan is no more required by US in the region against the war/fight against terrorism. The regional economic alliances establish strong linkages within the region and facilitate the process of regional socio-economic stability. These are the imperatives of the world economic order, which do not throw out security concerns, but on the contrary, guarantee economic stability and national as the major determinant.