Asia remains a highly volatile region shaped by historical conflicts, ethnic tensions, religious divides, and political instability that undermine efforts at long-term peace and regional integration. The security dynamics in the region, including the recent events in Bangladesh, Iran, and Turkiye, and ongoing challenges in Pakistan, have profound implications for regional economic cooperation and trade. This instability is a significant barrier to South Asia’s potential as a hub of economic growth and connectivity. In a multipolar world, regional connectivity and multilateral trade agreements shape the future of different countries. The regional dynamics with the US withdrawal from Afghanistan are now a concern for countries like Pakistan, China, Russia, and India. These are major stakeholders responsible for transforming the region through economic integration.
China has already established economic relations with the Taliban government. Another significant development is the recent visit of Russian Security Council Secretary, Sergei Shoigu to Kabul. Moscow signals its intent to delist the Taliban from its blacklist and bolster bilateral ties. This move aligns with parallel diplomatic efforts by China and Iran, demonstrating a coordinated approach by US rivals to engage with Afghanistan under Taliban rule. The focus of discussions is countering IS-K threats, enhancing trade, and integrating Afghanistan into regional connectivity initiatives like the NorthSouth Economic Corridor. Russia’s support for restoring Afghanistan’s observer status in the Shanghai Cooperation Organization (SCO) highlights the evolving strategic significance of Kabul amid broader efforts to reshape the region’s security and economic architecture.
Pakistan’s role in evolving regional dynamics is crucial because of its strategic topographical location. Regional collaboration and connectivity require stable and secure bilateral trade relations with immediate neighbours and other countries. Pakistan has a challenging neighbourhood, In the East the transgenic behaviour of India is an eternal problem and, in the West, a problematic porous border with Afghanistan – the Durand Line. Pakistan and Iran share a relationship that has been ‘blowing hot and cold,’ marked by periods of cooperation on trade and regional stability, contrasted with moments of tension over border security and geopolitical differences. The only peaceful neighbour is China – with CPEC, a flagship project of China’s Belt Road Initiative (BRI).
Central Asia’s energy wealth and strategic location offer Pakistan a vital opportunity to diversify trade and strengthen regional ties through initiatives like the New Economic Dialogue (NED) under the SCO and projects such as the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline and the Central Asia-South Asia (CASA-1000) power transmission line from Central Asia. Pakistan can position itself as a key player in Eurasian connectivity. Collaboration with Central Asia ties into Pakistan’s geoeconomic vision, promoting integration through the Khyber Pass Economic Corridor (KPEC) and the Peshawar-Kabul-Dushanbe Motorway, promising shorter, cost-effective transit routes for regional trade. The KPEC corridor will link Pakistan to Central Asia via Afghanistan. The expressway linking Peshawar with Kabul consists of Corridors 5 and 6 of the Central Asia Regional Economic Cooperation (CAREC). Corridor 5 runs through Pakistan, which provides the shortest link to the landlocked countries of Afghanistan, Tajikistan, and Uzbekistan. Once completed, there will be a significant reduction in transit time and costs for national and international trade transition, extend the Trans-Pakistan Expressway System (Karachi-Lahore-Islamabad-Peshawar) and integrate it with the planned Peshawar-Kabul-Dushanbe Motorway.
India has tried to connect to Central Asia while circumventing Pakistan over the years but it has been all in vain. New Delhi views participation in the International North-South Transport Corridor (INSTC) as a means to bypass Pakistan. However, Russia’s recent invitation to Pakistan to join the INSTC highlights India’s geographical limitations. As a result, India may need to engage in initiatives that include Pakistan to achieve greater integration with Central Asia. Pakistan has taken several steps towards India such as the Kartarpur Corridor agreement and the continuous invitations for dialogue with India, coupled with confidence-building measures like joint participation in regional projects. The recent SCO Moot in Pakistan is a hope for meaningful regional cooperation as India’s Foreign Minister, Dr Subrahmanyam Jaishankar also came to Pakistan (a visit of any high official from India in a decade). The summit has not only highlighted Pakistan’s role as a central player in regional security and economic cooperation but also opened the door to new opportunities for multilateral partnerships, particularly with Central Asia and Eurasia. Pakistan must explore new avenues for collaboration with Central Asia, it must also remain committed to improving relations with India but not compromising on its sovereignty.
Pakistan’s limitation for regional economic integration is not geographical but internal and external, increasing security threats – which constantly delay regional projects. Pakistan used the SCO summit to counter its image of international isolation and assert its regional influence. Hosting 900 delegates may lead to broader regional stability. The Prime Minister of Pakistan stressed peace, security, and connectivity, prioritizing CPEC and addressing shared challenges like Afghan security, climate change, and economic recovery. Pakistan’s experience with these crises demonstrates the potential for SCO collaboration. As the country navigates a critical phase, its ability to stabilize internally is essential for regional cooperation, connectivity, and economic integration. Internally, political instability since April 2022 has weakened the government’s capacity to implement reforms. The recent clash between a political party’s protestors and the State in the heart of Islamabad shows the intensity of political insecurity. The economic crisis— marked by reliance on IMF bailouts, a struggling export sector, and rising external debt—limits ambitious policies. Additionally, growing militancy in tribal areas and Balochistan threatens critical infrastructure projects like the China-Pakistan Economic Corridor. These internal challenges not only impede Pakistan’s progress but also pose risks to neighbouring countries, increasing threats of cross-border terrorism and regional instability. CPEC has exposed vulnerabilities, as seen in high-profile attacks on Chinese nationals and projects (such as the Dasu bus bombing and assaults on Chinese engineers). It has escalated security concerns, prompting Beijing to demand enhanced safety measures. These incidents have strained Pakistan-China ties, with China reportedly reconsidering its investments due to the growing risks. Any reduction in Chinese support would deepen Pakistan’s economic crisis, diminish its geopolitical leverage, and isolate it further in the international arena. For Pakistan, losing Chinese support would limit economic opportunities and geopolitical leverage, undermining its defense capabilities. Failure to enhance security could result in diplomatic isolation and a decline in strategic significance. Additionally, Pakistan’s engagement with the SCO offers a platform to address regional security concerns, particularly regarding Afghanistan and terrorism. The SCO’s Regional Anti-Terrorism Structure (RATS) provides an opportunity for Pakistan to share expertise and collaborate on counterterrorism efforts.
Along with regional integration, the relationship between Pakistan and the USA is also vital for both nations, particularly in light of our longstanding military collaboration and mutual interests. This partnership is not only strategic but also significant in addressing regional challenges. During a talk organised by the Pakistan American Press Association in Washington, D.C. participants from various spheres of society agreed that Pak-US relations are of utmost importance, with Republicans in office, this relation can be more dynamic and result-driven. I think Pakistan’s role is pivotal in South Asia and its evolving geopolitical landscape, it is a need of the time to differentiate between perception and reality. We are living in a world where nearly 5 billion people (of which 1.5 billion are Muslims) reside within 2,000 miles of Pakistan. This region with its 30 or so developing Muslim countries holds immense economic and strategic potential and we must act as a bridge between diverse regions and economies.
Our location at the crossroads of South Asia, Central Asia, and the Middle East uniquely positions Pakistan as a critical hub for regional trade, connectivity, and stability. The era of geopolitics is giving way to geoeconomics, and Pakistan must take the lead in initiatives like CPEC and broader regional integration efforts.
Ikram Sehgal
