PAKISTAN has earned international appreciation and respect for its role in mediating between the US and Iran and helping them achieve a ceasefire and a memorandum of understanding that aims to pave the way for a lasting settlement. This kind of mediatory role finds no precedent in Pakistan’s diplomatic history. It has raised Pakistan’s global standing and boosted its international image.

The diplomatic achievement has sparked discussion in the country about the economic benefits Pakistan might gain. Certainly, economic opportunities that could open from these developments merit serious thinking and exploring. Also, if the war had not come to a negotiated end there would have been enormous pressure on Pakistan’s fragile economy from higher oil prices, disruption in energy supplies and uncertain remittances. This could have derailed its economic stabilisation efforts.

But there has also been a fair amount of wishful thinking about the economic dividends from Pakistan’s diplomacy. Some even compared the present moment to the situation after 9/11, when Pakistan became a front-line state in the war on terror and recipient of significant US financial and military assistance. This is a false parallel. There is no economic largesse on its way from Washington. Nor is there a rationale for one.

Yet old habits die hard. There is a long history of the country’s ruling elites seeking and earning geopolitical rents from its international alignments. This helped them keep the economy afloat while avoiding domestic economic reform and taxing themselves and their political base. It also encouraged an attitude that looked outside rather than within to address the country’s economic weaknesses. And it created an official mindset of relying on pay-offs, bailouts........

© Dawn