Current Development of Pakistan’s Foreign Policy

A Policy in Transition

Pakistan has historically maintained a complex and diversified foreign policy shaped by its geography, security environment, economic requirements and relationships with major regional and global powers.

In 2022, Pakistan continued to expand both bilateral and multilateral engagement while attempting to navigate an increasingly competitive international system.

The country sought to strengthen relations with major powers, neighbouring states, the Muslim world and international organisations while simultaneously responding to domestic economic constraints.

Pakistan’s strategic location gives it considerable diplomatic relevance. Situated at the crossroads of South Asia, Central Asia, the Middle East and China, the country remains important to regional connectivity, security and trade.

Its Islamic identity also provides Pakistan with significant diplomatic space across the Muslim world, while historical and cultural relationships create additional opportunities in East and Southeast Asia.

During this period, Pakistan engaged with:

• The United States
• China
• Russia
• The European Union
• The Shanghai Cooperation Organisation
• The Organisation of Islamic Cooperation
• ASEAN countries
• Middle Eastern states
• Central Asian republics

Two developments in particular were presented as major diplomatic achievements: Pakistan’s removal from the Financial Action Task Force grey list and its role in advancing the Loss and Damage agenda at COP27.

Pakistan’s Foreign Policy in Transition

Pakistan’s foreign policy increasingly reflects an attempt to move from a predominantly security-centred approach towards one that gives greater importance to geo-economics, connectivity, trade, investment and economic diplomacy.

The publication of the National Security Policy 2022 symbolised this shift by placing economic security and development among Pakistan’s central national priorities.

This transition does not mean that traditional security concerns have disappeared.

Pakistan continues to face:

• Regional instability
• Terrorism
• Afghanistan-related security challenges
• India-Pakistan tensions
• Economic vulnerabilities
• External financing requirements

However, policymakers increasingly recognise that effective diplomacy in the modern international system is closely linked to economic strength.

Interactions with Global Actors

Pakistan continued active engagement with global institutions and international partners.

Its participation in the United Nations, Organisation of Islamic Cooperation, Shanghai Cooperation Organisation and other multilateral platforms enabled Islamabad to present its position on regional and international issues.

Pakistan’s diplomatic agenda included issues such as:

• Regional peace and security
• Afghanistan
• Climate change
• Kashmir
• Economic cooperation
• Terrorism
• Development
• Trade and investment

Pakistan’s ability to manoeuvre diplomatically, however, remains closely linked to the strength of its economy.

A country facing low growth, high external financing requirements and limited foreign-exchange reserves naturally has less room for independent diplomatic action.

Shift Towards Geo-Economics

One of the most important developments in Pakistan’s foreign-policy discourse has been the growing emphasis on geo-economics.

Geo-economics refers to the use of economic instruments, connectivity, trade and investment as major tools of international influence.

For Pakistan, this approach seeks to utilise its geographical position to promote:

• Regional connectivity
• Trade corridors
• Energy cooperation
• Foreign investment
• Transit trade
• Economic partnerships

The success of this strategy depends on domestic economic stability, institutional continuity and improved regional connectivity.

Relations with the Middle East

The Middle East remains one of the most important regions in Pakistan’s foreign policy.

Pakistan maintained high-level engagement with:

• Saudi Arabia
• United Arab Emirates
• Iran
• Qatar
• Türkiye

These relationships are important not only because of religious and historical ties but also because of trade, energy security, investment and employment opportunities for Pakistani workers.

Saudi Arabia

Saudi Arabia remains a major strategic and economic partner.

The relationship includes:

• Energy cooperation
• Financial assistance
• Investment
• Defence relations
• Religious ties
• Pakistani expatriate labour

United Arab Emirates

The UAE is also an important economic and diplomatic partner, particularly in trade, investment, remittances and infrastructure.

Iran

Relations with Iran remain strategically important because of the shared border, energy potential and regional security concerns.

Pakistan therefore seeks to maintain balanced relations with Iran while simultaneously preserving strong ties with Gulf Arab states.

Relations with Central Asia

Pakistan also expanded engagement with Central Asian republics, including:

• Kazakhstan
• Tajikistan
• Uzbekistan

Central Asia offers significant opportunities in:

• Energy
• Trade
• Transport connectivity
• Regional integration
• Security cooperation

Pakistan’s geographical position potentially allows it to serve as a commercial gateway connecting Central Asia with the Arabian Sea.

However, achieving this potential depends greatly on peace and connectivity through Afghanistan.

Diplomatic Engagement with East and Southeast Asia

Pakistan has also sought greater diplomatic and economic engagement with East and Southeast Asian states.

Relations with countries such as Indonesia and Singapore illustrate Pakistan’s interest in diversifying its economic partnerships.

Indonesia is particularly important because of its role as a major supplier of palm oil to Pakistan.

Pakistan’s trade with ASEAN has significant potential for expansion.

Greater engagement with Southeast Asia could help Pakistan diversify export markets and reduce excessive dependence on a limited number of traditional partners.

Diplomatic Engagement with Africa

Africa represents another major but relatively underutilised area of Pakistan’s foreign policy.

The continent offers considerable opportunities because of:

• Large consumer markets
• Natural resources
• Growing economies
• Infrastructure requirements
• Diplomatic partnerships

Pakistan’s Look Africa Policy seeks to expand trade, diplomatic representation and economic engagement with African states.

The establishment of additional diplomatic missions can help Pakistan improve political outreach and commercial access across the continent.

Pakistan’s close relationship with China and its involvement in the Belt and Road Initiative may also create opportunities for economic cooperation in African markets.

Removal from the FATF Grey List

One of Pakistan’s major diplomatic achievements in 2022 was its removal from the Financial Action Task Force grey list.

Pakistan had remained on the list since 2018 because of deficiencies identified in its anti-money-laundering and counter-terror-financing framework.

Grey-list status complicated Pakistan’s financial environment and created reputational concerns in dealings with international institutions and investors.

On October 21, 2022, the FATF removed Pakistan from increased monitoring after the country implemented the required action plans.

The development was important because it:

• Improved Pakistan’s international financial credibility
• Reduced reputational pressure
• Strengthened confidence in regulatory reforms
• Improved Pakistan’s diplomatic standing

Loss and Damage Fund at COP27

Pakistan also played an important role in international climate diplomacy during COP27.

The concept of Loss and Damage refers to climate-related harm that cannot be fully prevented through mitigation or adaptation.

This issue is especially important for developing countries that contribute relatively little to global emissions yet suffer disproportionately from climate disasters.

Pakistan’s devastating 2022 floods strengthened its diplomatic position on climate justice.

As chair of the G77 and China, Pakistan played an important role in maintaining developing-country support for the inclusion of loss and damage financing on the international climate agenda.

The COP27 agreement to establish funding arrangements for loss and damage was therefore widely regarded as an important diplomatic achievement.

Climate Diplomacy as an Emerging Foreign-Policy Tool

Climate change has increasingly become an important component of Pakistan’s diplomacy.

Pakistan can use climate diplomacy to advocate:

• Climate justice
• Adaptation finance
• Loss and damage financing
• Disaster resilience
• Technology transfer
• Sustainable development

Climate diplomacy gives Pakistan an opportunity to build partnerships with vulnerable developing countries and strengthen its role in multilateral forums.

Rebuilding Pakistan-US Relations

The Pakistan-US relationship has undergone significant transformation following the end of the war in Afghanistan.

For decades, security and military cooperation formed a major component of bilateral ties.

With the withdrawal of US forces from Afghanistan, the traditional security basis of the relationship became less significant.

This created both challenges and opportunities.

The two countries increasingly needed to explore areas of cooperation beyond Afghanistan and counter-terrorism.

Moving Beyond a Security-Centred Relationship

Pakistan-US relations should increasingly focus on:

• Trade
• Investment
• Information technology
• Climate cooperation
• Education
• Healthcare
• Energy
• Agriculture

The United States remains one of Pakistan’s most important export markets.

This economic dimension means that Washington remains relevant to Pakistan even as the traditional military relationship changes.

Pakistan-China Relations

China remains one of Pakistan’s closest strategic partners.

The relationship covers:

• Defence cooperation
• Infrastructure
• Investment
• Energy
• Diplomatic support
• China-Pakistan Economic Corridor

Pakistan’s foreign-policy challenge is to maintain its close partnership with China without allowing relations with Beijing to prevent productive engagement with the United States, Europe and other major economic centres.

This requires strategic balance rather than bloc politics.

Balancing Relations with Major Powers

Pakistan has historically attempted to maintain relations with competing global powers.

Its foreign policy has often required balancing relations among:

• China
• United States
• Russia
• European Union
• Middle Eastern partners

The changing international system makes such balancing increasingly difficult.

US-China strategic competition has intensified, while the Russia-Ukraine conflict has further complicated relations among major powers.

Pakistan therefore seeks to avoid being locked into rigid geopolitical blocs.

An issue-based foreign policy provides greater flexibility and allows Islamabad to cooperate with different states in different sectors.

Economic Diplomacy and Pakistan’s Foreign Policy

The central lesson of Pakistan’s contemporary foreign-policy experience is that diplomatic influence increasingly depends on economic strength.

Pakistan’s foreign policy must therefore support national economic objectives.

Key Priorities of Economic Diplomacy

• Increasing exports
• Attracting foreign direct investment
• Expanding IT exports
• Opening new markets
• Securing energy supplies
• Promoting tourism
• Strengthening regional connectivity
• Expanding overseas employment opportunities

Pakistan’s diplomatic missions should increasingly function as instruments for trade and investment promotion.

Major Challenges Facing Pakistan’s Foreign Policy

1. Economic Weakness

Economic instability limits Pakistan’s diplomatic autonomy.

Dependence on external financial assistance can constrain foreign-policy choices.

2. Political Instability

Frequent political crises reduce continuity in diplomatic and economic policy.

3. Terrorism and Regional Instability

Cross-border terrorism and instability in Afghanistan remain major security challenges.

4. India-Pakistan Tensions

Continuing hostility with India limits regional economic integration and diverts resources towards security competition.

5. US-China Competition

Pakistan must maintain its strategic relationship with China while preserving economic and diplomatic engagement with the United States.

6. Weak Regional Trade

Pakistan trades significantly less with neighbouring countries than its geographic position would suggest.

Way Forward for Pakistan’s Foreign Policy

1. Prioritise Geo-Economics

Economic strength should become a central pillar of Pakistan’s diplomacy.

Foreign relations should increasingly support trade, investment, connectivity and technological development.

2. Maintain Strategic Balance

Pakistan should avoid unnecessary alignment with rigid geopolitical blocs.

Balanced relations with China, the United States, Russia, Europe and the Muslim world can protect Pakistan’s strategic flexibility.

3. Expand Economic Partnerships

Pakistan should diversify its international economic relationships beyond traditional partners.

Greater attention should be given to:

• Africa
• Central Asia
• Southeast Asia
• Latin America
• Emerging economies

4. Strengthen Climate Diplomacy

Pakistan should build on its experience at COP27 and continue advocating for climate justice, adaptation finance and loss-and-damage support.

5. Strengthen Domestic Economic Capacity

Independent foreign policy ultimately depends on internal economic strength.

Without stronger exports, investment, institutional stability and economic productivity, Pakistan will remain vulnerable to external financial pressure.

6. Strengthen Institutional Foreign Policymaking

Foreign policy should be based on institutional continuity, professional expertise and long-term national interests rather than short-term political considerations.

The Foreign Office should remain central to diplomatic planning and execution.

Conclusion

Pakistan’s foreign policy is passing through an important transition.

The country continues to manage traditional security concerns while increasingly recognising the importance of geo-economics, climate diplomacy, trade and economic connectivity.

Pakistan’s diplomatic engagement with China, the United States, the Middle East, Central Asia, Southeast Asia and Africa demonstrates its desire to maintain a diversified foreign policy.

Achievements such as removal from the FATF grey list and Pakistan’s role in the Loss and Damage agreement at COP27 demonstrate the potential of sustained diplomatic engagement.

However, diplomacy cannot remain disconnected from domestic economic realities.

A weak economy limits strategic autonomy, while a stronger and more productive economy creates greater diplomatic leverage.

Pakistan should therefore pursue a foreign policy that is balanced, independent, economically driven and based on long-term national interests.

The United States should be viewed not merely through the lens of security cooperation, while relations with China should continue to remain strategically important without becoming an obstacle to wider global engagement.

Ultimately, the strongest foundation of an independent foreign policy is internal strength. A country that is economically stable, politically coherent and institutionally capable possesses far greater freedom to protect and advance its national interests.