Evidence based foreign policy
How should foreign policy be formulated? There is a global movement towards ‘evidence-based foreign policy making’. We need to reexamine how we formulate our foreign policy.
Four things that foreign policy should not be: personality based, opinion based, based on pre-existing biases or based on anecdotes. Two things that our foreign policy ought to be: national interest driven and evidence based.
An evidence-based foreign policy is a scientific method with four components: fact finding, asking informed questions, forming informed answers and transparency.
We need to ‘collect evidence’ and ‘determine national interest’. National interest is defined as: “The interest of a nation as a whole held to be an independent entity separate from the interests of subordinate areas or groups”.
On 18 March 2021, General Qamar Javed Bajwa, at the Islamabad Security Dialogue, said that it is our “desire to change the narrative of geo-political contestation into geo-economic integration.”
The National Security Policy of Pakistan (2022-2206) states: “Economic interest as the most critical dimension of our national interest”. Question: Where does our national economic interest really reside? Answer: Exports, imports, remittances and our debt profile.
Exports: What are the big-ticket items in our exports and what are their destinations? Our largest export items are: bed linen, table linen, toilet linen and kitchen linen collectively worth $3.5 billion. Next biggest export item is rice; $2 billion.
Then there’s non-knit men’s wear; $1.7 billion followed by non-knit women’s wear; $1 billion. Lo and behold, our largest export destination is the United States to whom we export goods worth $6 billion. Imagine; 20 percent of all our exports go to the United States. Followed by the United States, China, Germany and the United Kingdom are our largest export destinations.
For the record, the United States, the United Kingdom, Germany, the Netherlands, Spain, Italy, Belgium, France, Canada, Poland and Portugal take in close to 55 percent of all exports.
Imports: We import refined petroleum, crude petroleum and petroleum gas worth $12 billion, which is the single-largest import.
Then comes palm oil, $2 billion followed by scrap iron worth $1.5 billion. China is the largest importer into Pakistan followed by the United Arab Emirates, the United States and Indonesia.
Remittances: Our single-largest source of remittances is Saudi Arabia from where we get $4.8 billion or 16 percent of all our remittances.
Next is the United Arab Emirates, $3.5 billion. Intriguingly, the highest 10-year growth in remittances has been from Italy where remittances went up by 1,000 percent. Next is France where 10-year growth has been 950 percent followed by Spain with a growth of 650 percent.
External debt profile: Almost 50 percent of our external debt comes from multilaterals, 15 percent is bilateral, 10 percent Paris Club, 10 percent commercial and the remaining 15 percent is Chinese debt.
Conclusion 1: Bilateral trade between Pakistan and the US hovers around $8 billion and the US is the only country with which Pakistan enjoys a billion-dollar surplus. This is where our national economic interest resides.
Conclusion 2: Bilateral trade between Pakistan and China hovers around $16 billion and China is the only country with which Pakistan suffers a trade deficit of $11 billion a year.
Conclusion 3: Fifty-four percent of our exports are bought by a dozen countries that include the US, the UK, Germany, Netherlands, Spain, Italy, Belgium, France, Canada, Portugal and Australia. This is where our national economic interest resides.
Conclusion 4: Eighty-five percent of our external loans come from US-dominated multilaterals and commercial sources. This is where our national economic interest resides.
Conclusion 5: Russia produces less than 3 percent of the global GDP. As far as Pakistan is concerned, less than one percent of our exports go to Russia.
Pakistan’s exports to Russia include citrus ($60 million), non-knit men’s suits ($20 million) and leather apparel ($17 million). As far as imports into Pakistan are concerned, 0.9 percent of our imports come from Russia – cereals $287 million, vegetables $138 million and rubbers $29 million. Russia has little or no role in Pakistan’s economy.
