Foreign Policy Challenges

Internal dynamics dictate a country’s foreign policy. This kind of classic definition is still not lost on Pakistan, which has been left with one major internal factor: economic insufficiency expressed as debt.

The immensity of external debt reads like a horror story. As per the report of the State Bank of Pakistan, External Debt and Liabilities Report 2024, Pakistan’s total external debt and liabilities reached US$133.455 billion on 30 September 2024. Of this, Pakistan owed US$6.99 billion to the Paris Club, US$39.903 billion to multilateral donors, US$9.246 billion to the IMF, and US$6.800 billion to international bonds such as Eurobonds and Sukuks, whereas foreign exchange liabilities stood at US$12.042 billion.

In the 1980s, Pakistan took pride in having a large exportable population of labourers and semi-skilled workers employed in Arab countries. Nevertheless, two factors undermined this trend. First, machines gradually took over the labour market, rendering several types of workforce redundant. Second, owing to student politics, most vocational institutes in Pakistan faced closures. Now, in 2025, Arab countries require skilled and highly capable manpower, making them less dependent on Pakistan. On the other hand, many Pakistanis still refuse to let go of the dream of earning in foreign currency. Consequently, many members of Pakistan’s labour class can be found begging (on the streets and in shopping malls) in certain Arab countries. While Arab countries are physically accessible, European countries are not. This is why a portion of the same labour class drowns in the Mediterranean Sea. These incidents are referred to as the capsizing of boats carrying illegal migrants who attempt to reach European shores via the donkey route.

Defying the classic definition of foreign policy, economic insufficiency forces Pakistan to acquiesce to external dynamics. 20 January downplayed Pakistan’s international standing. No one from Pakistan was invited to attend the oath-taking ceremony of the newly elected United States (US) President Donald Trump. This exclusion signified Pakistan’s diminishing relevance in the immediate future. With that, external dynamics are poised to redefine the contours of Pakistan’s foreign policy. When dynamics are external, challenges are numerous.

Years ago, in Pakistan, there was an ongoing debate on who held supremacy over foreign policy: the civilian government or the military. Now, the word supremacy has been erased. Neither the civilian nor the military leadership holds any real authority over foreign policy, which is dictated by international events presided over globally by the US. The next external players are China, India, and European and Arab countries. To cope with this challenge, Pakistan’s foreign policy has turned reactive—subordinate to the policies of other countries asserting their national interests. Within this assertion, Pakistan tries to find leeway to safeguard its national interests—just short of an independent foreign policy. Economic insufficiency has brought Pakistan to this dismal state.

The year 2025 indicates that international dynamics have changed. Trump is unsparing in taxes, tariffs, and sanctions. Pakistan’s attempt to mollify the Trump administration through Saudi Arabia may not serve the desired purpose. Interestingly, economic insufficiency is also driving US foreign policy. Trump has assertively asked Saudi Arabia to invest US$1 trillion in the US. In response, Saudi Arabia has agreed expediently, signifying that Pakistan’s benefactor is itself a subordinate. India has a US$35 billion trade surplus with the US. Trump has also asked India to buy more American-made weapons and ensure a fair bilateral trading relationship—meaning India should return the trade surplus. India, like Saudi Arabia, is compliant. This development raises a question: what utility does Pakistan hold in the eyes of the Trump administration?

With Pakistan’s economic insufficiency, two points are relevant. First, during Trump’s previous presidential tenure (Jan 2017 to Jan 2021), the haste with which Pakistan repatriated Indian pilot Abhinandan Varthaman in early March 2019, after succumbing to US pressure, spoke volumes about Pakistan’s inability to resist, thereby losing the option of being a sovereign actor. Second, on New Year’s Eve 2018, through a tweet, Trump lamented doling out US$33 billion in aid over the past 15 years, receiving little in return except “lies and deceit,” portraying Pakistan as a treacherous ally of the US. Now, in the immediate aftermath of the US withdrawal from Afghanistan, the ramifications of Pakistani military officials visiting Kabul in September 2021 and sipping tea—interpreted in adverse ways—have yet to surface, exposing the gulf of mistrust between Pakistan and the US.

Pakistan has almost lost the option of pursuing an active (or proactive) foreign policy. The manoeuvring space Pakistan independently enjoys is limited to decisions on Gwadar or testing one missile over another—whether or not Pakistan wants to send a friendly or hostile message across its borders. The rest is sheer reactivity. That is, an external event must occur to compel Pakistan to react and delineate any dimension of its foreign policy. For instance, if Afghanistan does not heed Pakistan’s requests, Pakistan can align itself with Tajikistan. If India attempts to befriend Afghanistan, Pakistan can strengthen ties with Bangladesh.

Nevertheless, a pressing concern is that, as the international landscape increasingly revolves around economics, Pakistan’s space for reactivity is also shrinking. Economic insufficiency continues to weigh on Pakistan’s approach to challenges, whether external or internal.

Dr Qaisar Rashid
The writer is a freelance columnist. He can be reached at qaisarrashid@yahoo.com