Pakistan, unlike India, did not have the luxury to remain non-aligned for long since it neither had the resources nor institutions post-partition. Therefore, in a carefully crafted strategy, Pakistan placed a bet on United States and chose its side early on in  Cold War. Pakistan’s foremost threat perceptions emanated from India and that led to Pakistan joining U.S. orchestrated alliances like SEATO and CENTO even though their objectives were not directly aligned with those of Pakistan. The military and economic aid Pakistan received as part of joining those alliances helped Pakistan reinforce its security infrastructure helping it deal with its security dilemma vis India. The USSR did not provide Pakistan with any such opportunity to join military alliances like the U.S. did. So the U.S. was an obvious and rational choice for a smaller and weaker country like Pakistan in the early Cold War years.

The military and economic aid Pakistan received by US, helped Pakistan reinforce its security infrastructure helping it deal with its security dilemma vis India. The USSR did not provide Pakistan with any such opportunity like the US did. So U.S. was an obvious and rational choice for Pakistan.

Over a period of 75 years since the relationship established between the two countries, there have been several challenges. The first and foremost being that Pakistan has been unable to sell its threat perceptions vis-a-vis India, well to U.S. And for the U.S., the dilemma had been balancing one at the cost of the other. The second biggest challenge has been misinterpretation of the stated and perceived objectives of the relationship. The U.S. never promised Pakistan, under any agreement or treaty, that it would extend its security umbrella to Pakistan and protect it against Indian attack at any given point in time in history. Yet, Pakistan always perceived that since their relationship was stable, the U.S. would always come to Pakistan’s rescue if a call was given. This led to disappointments in 1965 and also in 1971. Even though the presence of USS Enterprise in Indian Ocean in 1971 was part of the U.S. signaling to show support for Pakistan, its mere presence did not alter the trajectory of the war. These two challenges gave birth to many misunderstandings between the two and set the tone for a relationship beset with mutual grievances. However, there were times when both benefitted mutually from this relationship, Pakistan more so than the U.S. At the height of its alliance with the U.S. during the 1980s, Pakistan not only benefited from receiving economic and military assistance to defeat the Soviets in Afghanistan but it also became a threshold nuclear weapon state – a feat made possible by the U.S. turning a blind eye to Pakistan’s nuclear weapons development.

Pakistan diversified its relations during the 1960s and opened up to China while being in a strategic alliance with the U.S. to fight the ChiComs. This alone speaks volumes about Pakistan’s potential as a small yet resilient country which has been reasonably balancing its relations with the U.S. and the rising major power, China, for decades now. If Pakistan can do it in the most difficult of decades in its history, there is no reason why it cannot continue to balance its relations with the U.S. and China in the coming decades as well.

De-dollarization is not the bandwagon Pakistan should be hopping on. The dominance of the US dollar is here to stay in the foreseeable future even though countries might want to reduce their vulnerability to fluctuations in the value of the U.S. dollar. If the past 75 years are any indicator of what the next 75 would be like, Pakistan will not be in a position to enact policies which will reduce its dependence on the U.S. financial system. The dependencies that are now perpetuated due to poor fiscal policies, leadership crisis, securitization of politics and lack of foresight to deal with the economic challenges of the country, Pakistan will not be in a position to break free in coming decades.

De-dollarization is not the bandwagon Pakistan should be hopping on. The dominance of the US dollar is here to stay in the foreseeable future even though countries might want to reduce their vulnerability to fluctuations in the value of the U.S. dollar.

What is the best course of action for Pakistan if one accepts the shortfalls and vulnerabilities as a reality? Post-COVID19 and post-Russian-Ukraine conflict, there is an emerging club of the most-sanctioned countries with Iran and Russia in the lead. China’s bold support for both Russia and Iran is unprecedented primarily given Chinese interests in the Middle East and Central Asia to ensure that China’s access to energy supply remains stable and secure. By keeping both Russia and Iran on its right geopolitical side, China also wants to undercut U.S.’ geopolitical influence in the region and is filling up the vacuum left after the hasty U.S. withdrawal from Afghanistan after twenty years of military presence in the region.

For a country like Pakistan, all players in its immediate neighborhood as well as extra regional forces like the U.S. are extremely important for its survival, however, it does not need to pick and choose between a side.

As the U.S. moves towards de-globalization and reshoring, aiming to bring back outsourced manufacturing and production units back to the U.S. or moving away from its dependency on the global supply chains dominated by China, Pakistan needs to find its opportunity. Pakistan could benefit from the reshoring of U.S. companies by attracting FDI and offering low-cost workforce to attract manufacturing companies creating job opportunities for Pakistanis. While the U.S. is turning wheels to enable reshoring, Pakistani companies can integrate more closely into the U.S. supply chain by providing components and raw materials needed for reshoring operations. But for this direction to be taken where Pakistan positions and reorients itself to benefit from the dividends of geoeconomics, requires vision and leadership. It also requires looking beyond what India is doing and being constantly worried about how strategically it is now poised to provide the U.S. all that it needs for its Indo-Pacific strategy.

Pakistan needs to regain economic resilience, resolve its leadership crisis, align its foreign policy priorities with those of the major powers and balance its relations to benefit most from the changing trends globally.

There is much value in Pakistan-U.S. relations beyond strategy. What Pakistan needs to understand is that historically too, U.S. alliances in our region were never at the cost of the other. And they will not be so in the next 75 years. Pakistan needs to regain economic resilience, resolve its leadership crisis, align its foreign policy priorities with those of the major powers and balance its relations to benefit most from the changing trends globally.