Pakistan in the Geopolitics of Asia: Four Scenarios and Strategic Options

The group envisions a scenario where geo-economic trends favour economic development, but are not without geopolitical tensions. The scenario depicts an intensifying but controlled geopolitical competition between the United States and China, particularly over the South China Sea. Tensions between the two powers escalate but fall short of full-scale military conflict, which leads to major disruption of trade routes across the South China Sea. As a result of this, China seeks alternative routes to safeguard its trade flows. This shift creates a significant opportunity for Pakistan, whose geostrategic position becomes even more crucial. As China reroutes a significant portion of its trade through the China-Pakistan Economic Corridor (CPEC), connecting China to the Arabian Sea via Pakistan’s ports, Pakistan’s importance in regional trade increases. This development not only elevates Pakistan’s role as a central player in regional trade but also provides the country with the strategic leverage to maintain its delicate balancing act.

In this scenario, Pakistan assumes a dual role by deepening its partnership with China through securing land and maritime routes for Chinese trade, while keeping diplomatic channels open with the US, which remains interested in sectors such as renewable energy investments and trade partnerships around Special Economic Zones (SEZs).

In this scenario, Pakistan turns the geopolitical conflict into an economic opportunity, strategically positioning itself as a crucial player in the evolving geopolitical order by maintaining a delicate balance in its relations with both China and the US. It leverages its balancing strategy to boost exports, expand technological cooperation with China, and improve supply chain management. The role of its military in safeguarding key CPEC routes further solidifies Pakistan’s regional influence.

To navigate these geopolitical and geo-economic complexities, Pakistan must pursue the following strategic options:

1. Economic diversification

Prioritizing energy security, infrastructure development and economic reform is essential for strengthening Pakistan’s economic resilience. To achieve sustainable growth, Pakistan must address existing challenges such as political instability, corruption, and governance inefficiencies, all of which deter investment and hinder economic growth. By diversifying its economy beyond traditional sectors, emphasizing human capital development, and reducing its reliance on foreign aid, Pakistan can move towards a more sustainable growth model.

Investments in energy projects, particularly renewable energy, alongside improvements in infrastructure, are essential to ensure long-term economic growth. Equally important is the development of SEZs that attract diversified foreign direct investments and spur industrial growth. Additionally, reforming trade policies and promoting a business-friendly environment will be pivotal in enhancing Pakistan’s competitiveness in global markets.

2. Balancing foreign relations through a geo-economic perspective

Pakistan’s National Security Strategy advocates for a transition from a purely geopolitical approach to one that focuses on geo-economics, highlighting the importance of establishing economic partnerships that aligns with the national interests. To achieve this, Pakistan must adopt a diversified foreign policy that seeks balanced relationships with global powers, particularly China and the US, while avoiding overdependence on any single partner. Pakistan can benefit economically from its strategic alliances while maintaining its sovereignty and autonomy.

Pakistan should leverage its role in CPEC to further integrate into broader regional economic frameworks, connecting Central Asia, South Asia, and the Middle East. With a strong emphasis on enhancing connectivity, CPEC can become a major driver of economic growth, linking Pakistan’s markets to energy-rich neighbours and providing secure trade routes for China. Simultaneously, Pakistan must also engage the US in sectors such as renewable energy, technology, and infrastructure development to ensure a well-rounded and balanced economic approach.

3. Promoting maritime security and sustainable resource management

Maritime security is a crucial component of Pakistan’s economic strategy, given the pivotal roles that the Arabian Sea and Indian Ocean play in the country’s trade and security landscape. Pakistan must continue to bolster its naval capabilities to safeguard key maritime routes linked to CPEC and ensure the security of its ports. Strengthening the Pakistan Navy, particularly through initiatives like Taskforce 88, responsible for securing maritime routes of CPEC, helps ensure the protection of vital sea-lines of communication and foster stability in the region.

Beyond security, Pakistan’s development model must emphasize the sustainable management of its natural resources. This involves optimizing the use of both land and maritime resources to boost economic growth while addressing environmental challenges such as climate change and marine pollution. Investments in green energy and sustainable agriculture are key to ensuring economic sustainability while mitigating the adverse impacts of environmental degradation.

4. Human capital development and technological innovation

Pakistan must prioritize human capital development to fully harness the economic potential of its young population. By investing in education, vocational training, and technological innovation, the country can position itself competitively in the global marketplace and foster a robust knowledge-based economy. In this age of rapid technological advancement, Pakistan needs to actively embrace innovation in sectors such as artificial intelligence, digitalization, and automation. Establishing a supportive ecosystem for emerging technologies will not only help diversify the economy but also elevate Pakistan’s status as a regional hub for technological innovation.  

Summary of scenario by Saima Aman Sial, Lecturer, University of Central Punjab, Lahore, Pakistan

The group envisions a scenario where geopolitical competition is effectively managed, and geo-economic trends favour robust economic development for the country. Central to this vision is Pakistan’s success in balancing its relationships with both the United States and China, enabling the country to benefit from both partnerships. This has allowed Pakistan to maintain its strategic autonomy while capitalizing on economic opportunities from diverse global players.

In this scenario, Pakistan has established multiple special economic zones (SEZs), attracting foreign investment from not only China but also the US, Turkey, and other countries. This diversification of investment sources has led to stable economic growth and reduced dependency on any single partnership. Additionally, Pakistan’s strategic location has facilitated the creation of new trade routes and economic corridors, enhancing regional integration and increasing its prominence in global trade networks.

This scenario also assumes a significant reduction in regional conflicts, particularly with India, allowing Pakistan to focus its efforts on economic growth. Enhanced regional stability has also opened up the country's natural and cultural resources to international tourism, further contributing to economic growth.

To achieve this scenario of a thriving Pakistan, the group highlighted several strategic options in the form of domestic and international policies.

1. Strengthening the rule of law

The future envisioned in the scenario depends on a politically stable Pakistan, underpinned by a strong rule of law and empowered institutions. A key priority is the suppression of violent extremism through the reinforcement of existing legal frameworks, the improvement of law enforcement capabilities, and ensuring a justice system equipped to handle extremism-related cases effectively. At the same time, a resilient constitutional framework is essential for delineating the powers of the executive, legislative and judicial branches, establishing checks and balances that preserve political stability and institutional integrity.

Economic growth is equally crucial to Pakistan’s stability. Improving the ease of doing business is a vital step in addressing the country’s economic challenges: fostering a favourable environment for investment and entrepreneurship. This requires a well-enforced rule of law to ensure business confidence and predictability. Additionally, the development of infrastructure, such as efficient transport networks and a reliable energy supply, supports expanding business activities and thereby further promotes economic stability and growth.

2. Developing indigenous solutions for domestic challenges

Domestic challenges such as climate change, water management, agriculture and unplanned urbanization pose significant obstacles to Pakistan's progress toward this best-case scenario. Addressing these non-traditional security threats with localized solutions is vital. This includes managing population growth and adopting sustainable development practices to ensure long-term viability and stability.

Investing in education and skills development is key to creating a high-value workforce, and in turn to facilitating Pakistan's transition to a knowledge-based economy. Diversifying the economic base beyond agriculture and textiles while simultaneously developing the relevant human capital will yield substantial benefits for the country. Achieving this requires comprehensive and targeted reforms in the education system, aligning it with future economic needs, and enhancing research capabilities to drive innovation and growth.

3. Pursuing a neighbourhood first policy

Internationally, the scenario envisions Pakistan becoming increasingly relevant on the global stage by pursuing a more independent and consistent foreign policy. To successfully navigate the geopolitical landscape, Pakistan must maintain balanced relations with both the US and China, while prioritizing its national interests and strategic autonomy. Diplomacy will be key in this regard. The group also highlighted the significance of the China-Pakistan Economic Corridor (CPEC) as a catalyst for infrastructure development and regional connectivity. By leveraging its strategic location and ports, Pakistan has the potential to serve as a pivotal hub for Asian trade, but this must be supported by addressing domestic economic challenges.

Pakistan should also focus on strengthening ties with neighbouring countries such as India, Iran and Afghanistan, while maintaining a balanced relationship with global powers of China and the US. Initiatives like CPEC and participation in regional forums are critical to safeguard Pakistan's interests: Such forums include the Shanghai Cooperation Organization, the South Asian Association for Regional Cooperation, and the Economic Cooperation Organization. Enhancing regional connectivity, particularly by developing Gwadar Port into a major trade hub and promoting the blue economy, will further bolster Pakistan's role in facilitating trade between Central Asia and the Arabian Sea.

Summary of scenario by Samuel Shah, Intern, Friedrich-Ebert-Stiftung (FES) Pakistan Office

The group envisions a scenario where geo-economic trends are unfavourable for economic development, but geopolitical competition is carefully managed. The title of the scenario Radd-ul-Façade for Pakistan means Pakistan's Quest to Overcome Challenges & Assert its rightful place in the world. The strategic competition between the United States and China is contained, with both powers recognizing the immense risks of a potential escalated conflict and taking steps to prevent it from happening. However, this does not prevent them from competing more aggressively on geo-economic and technological fronts. While China has made substantial economic progress in Pakistan, completing Phase I of the China-Pakistan Economic Corridor and achieving significant milestones in Phase II, the US is endeavouring to counter China’s economic influence by including Pakistan in its own investment and infrastructure initiatives.

At the policy level Pakistan strives to uphold its stance of not aligning with any political bloc, but the domestic fallout of the US-China geo-economic competition is creating internal polarization. This is due to the conflicting priorities of domestic actors whose economic and business interests are tied either to the US or to the Chinese economic spheres. Meanwhile, the US has intensified its information campaign, portraying China’s initiatives as a debt trap and framing Chinese investments as a form of economic colonization of Pakistan.

Regionally, Pakistan's rivalry with India is managed in a way that the possibility of kinetic warfare is minimal. However, given persistent and strong anti-Pakistan sentiments in India, this deep-rooted hostility has reduced the likelihood of even political opponents within India adopting a softer stance towards Pakistan. As a result, the diplomatic deadlock between the two countries persists, hampering the prospects of geo-economic integration in South Asia.

To emerge stronger in the face of adversity and to effectively deal with the challenges mentioned above, Pakistan needs to adopt the following strategic options:

1. Institutionalizing decision-making and adopting long-term policies

Pakistan faces significant challenges in navigating its rapidly evolving geostrategic environment due to ineffective policy making. The absence of institutionalized decision-making has led to inconsistent and short-term policies that fail to address the nation’s long-term needs. This has allowed arbitrary and reactive approaches to take root, preventing Pakistan from adequately responding to global developments.

To overcome these hurdles, Pakistan must implement long-overdue institutional reforms that foster coherent and strategic decision-making. By empowering institutions to take ownership of long-term policies, the country can break free from the cycle of short-term thinking. These reforms will enable Pakistan to better address the complex geopolitical shifts it faces and adopt a more stable and sustainable approach to its domestic and international challenges.

2. Balancing act of US-China relations

After implementing essential domestic reforms, Pakistan should focus on creating a strategic roadmap that effectively navigates the US-China rivalry. While the ongoing geo-economic competition between the two powers poses challenges, it also offers Pakistan opportunities to secure investments and business deals that best align with its interests. By maintaining a balanced relationship with both the US and China, Pakistan can leverage this rivalry to its strategic advantage.

To achieve this, Pakistan must develop a carefully calibrated strategy, backed by consistent policy implementation. Successfully navigating the zero-sum dynamics between these global powers will require a robust foundation of institutional reforms and strong ownership of strategic decision-making within Pakistan’s governing institutions.

3. Investing in youth for national development

With youth (youth would be considered below the age of 30) comprising over 60 percent of Pakistan’s population, this demographic holds immense potential to become the country’s greatest asset, if equipped with modern skills and quality education. However, there is currently no clear strategy to transform this group into a skilled workforce capable of driving national development. This lack of direction has contributed to a significant brain drain, with talented individuals seeking opportunities abroad, benefiting other nations while fostering a culture of mediocrity at home.

To reverse this trend, Pakistan must prioritize investments in education and skill development, while also creating incentives for youth to stay and contribute to the nation’s progress. A comprehensive roadmap to harness their potential is essential to ensuring that this generation becomes a driving force for Pakistan's future growth.

Summary of scenario by Hamdan Khan, Research Officer, Strategic Vision Institute, Islamabad.

The group envisions a scenario of where geopolitical competition spirals out of control and there is a trend of geo-economic deterioration, leading to violent conflicts. Pakistan’s response would be determined by its internal political, economic, and security conditions. In this scenario, Pakistan teeters on the brink of economic default, with a struggling economy forcing the country to choose between aligning with one or the other of the two global powers to stabilize its situation. At the same time, the nation grapples with insurgencies in two provinces, deep societal and political divides, and an undeclared de facto military rule.

Against this backdrop, Pakistan initially seeks an economic bailout from the United States. However, the US leadership attaches conditions to the aid, including demands that would effectively force Pakistan to sever ties with China. These conditions are deemed impractical and unacceptable. Consequently, Pakistan turns to China, which agrees to provide assistance but imposes its own conditions. Beijing requests that Islamabad repair its fragile relations with neighbouring and other regional nations to secure their goodwill and cooperation. Additionally, China insists on a comprehensive plan to secure the China-Pakistan Economic Corridor. It also attaches stringent terms to the loans, which further increase Pakistan’s indebtedness; however, the country has little choice but to accept.  

While these decisions lead to gradual economic stabilization and significant improvements in Pakistan’s internal political and security situation, they also have negative consequences. These include the entrenchment of authoritarian rule, an exacerbated brain drain where Pakistan’s brightest talents, especially the youth, seek opportunities abroad, a widening gap between the ruling elite and the general public, and severely strained relations with the US-led Western bloc of nations.

In view of this undesirable scenario Pakistan is recommended to follow the following strategic policy options to arrest ongoing domestic trends:

1. Redefining the state

In simple terms, Pakistan can no longer afford to operate as an undeclared security state and must take concrete steps to restore balance. This requires deep political introspection, revisiting historical and current missteps that have compromised Pakistan's internal and external sovereignty. Restoring this balance involves addressing the power disparity between political and military leadership.

Achieving this requires a unified political consensus, where leaders agree on the distinct roles and responsibilities of institutions and ensure that these boundaries are respected. Only through such cooperation can Pakistan rebuild and strengthen its governance framework for a more stable future.

2. Strengthen regional relationships

This shift presents both a challenge and an opportunity for Pakistan. It requires abandoning outdated policies that have strained regional relationships, and instead adopting approaches that foster mutual trust and confidence. A constructive path forward would involve collaborating with neighbouring states on shared challenges, such as climate change, and creating opportunities for cooperative action.

Additionally, Pakistan must prioritize policies that promote regional trade, infrastructure development, and connectivity. Strengthening these areas would foster an environment conducive to regional integration, driving economic growth and stability for both Pakistan and its neighbours.

3. Adherence to an independent foreign policy

Pakistan’s approach would rest on two key principles: maintaining an unwavering commitment to sovereignty and territorial integrity, and rejecting any measures that could undermine its economic interests. Achieving these goals requires revisiting the first strategic priority: fostering strong political consensus; clearly defining institutional roles; and strengthening institutions. This would safeguard the state from being manipulated by individual interests or short-term gains, ensuring that decisions are made in the broader national interest.

Summary of scenario by Aiza Azam, Lecturer with the Department of International Relations, and Coordinator for Outreach and Events for the Faculty of Aerospace and Strategic Studies, Air University, Islamabad.