Pakistan’s new government can improve relations with the United States and India

The Pakistani parliament elected Shehbaz Sharif as the country’s new prime minister, a few days after his predecessor Imran Khan was ousted in a no – confidence vote.

Aamir Qureshi | AFP | Getty Images

Pakistan has a new prime minister – and that could bode well for the South Asian country’s return to a healthier economy and its relationship with its traditional supporter, the United States, as well as its rival, India.

On Monday, Pakistan’s parliament elected Shehbaz Sharif as the country’s new prime minister, a few days after his predecessor Imran Khan was ousted in a no – confidence vote.

In what an observer called the “confirmation of democracy,” the movement was by no means inevitable in a country where no prime minister has served a full term.

Surprising observers, the almighty Pakistani army, which has ruled the country for decades by staging coups, remained in the barracks.

A crucial intervention by the judiciary was the next surprise. Pakistan’s Supreme Court ruled that Imran Khan’s government should face a no – confidence vote that it had sought to block. Khan eventually lost the reshuffled confidence vote in the early hours of Sunday and was removed from office.

What will Sharif do?

In his first speech, the 70-year-old Sharif said he intended to transform Pakistan into a “paradise” for investment, while announcing an increase in the minimum wage.

Sharif’s way forward is not easy, Iqbal Singh Sevea, director of the Institute of South Asian Studies at the National University of Singapore, told CNBC.

“He has inherited an economy rattled by a balance of payments deficit and inflation. He will have to increase the state’s capacity to generate revenue through taxation and increased investment, especially in the export sector,” the associate professor said.

The dream of Pakistan is that they can export to China. The reality for Pakistan is that they are exporting to the US and Europe.

James Schwemlein

Senior Director, Albright Stonebridge Group

Pakistan is on its 23rd rescue package from the IMF. The country’s economy is under pressure from rising inflation, at over 10% this year, amid rising prices for crude oil and other commodities after the war in Ukraine.

“Under his supervision, Pakistan is likely to negotiate another loan with the IMF and will have to commit to structural reforms and generate more tax revenue,” Sevea said. “The task is all the more difficult given that he will have to do this without seeming to cut subsidies and go against welfare policies.”

Sharif is a well-known figure internationally, according to James Schwemlein, a senior executive at Washington-based Albright Stonebridge Group, who pointed to his reputation as a skilled administrator.

“Shehbaz Sharif ran Pakistan’s largest province, Punjab. He did so largely by developing a very positive impact on business. He was responsible for significant infrastructure investments. He is well known by all the international interlocutors – whether American or Chinese, ” he said .

India: Improved conditions?

India in particular will be aware of the new administration.

The way events unfolded in Pakistan is likely to give New Delhi an opening to improve relations with its neighbor, former Indian Foreign Minister Shashank told CNBC.

Pakistan’s “Confirmation of Democracywould provide an “opening to move forward with bilateral relations,” he said.

“But the test will be signals from the Sharif government and its almighty army,” Shashank added. “The Pakistani army is desperate to build relations with the United States,” he said.

USA: Tape repair

The key priority for the new government would be to fix ties with Washington, analysts said.

Khan had used his oft-repeated assertion of a US conspiracy to remove him from power to block the no-confidence motion against his government. He claimed that the United States was outraged at the perception that Pakistan under him had moved closer to Russia and China.

Khan had moved from the traditional pro-American establishment position to pursuing a markedly different foreign policy and embraced China’s Belt and Road projects, Schwemlein told CNBC’s Asia Squawk Box.

He called his opposition to the United States “dangerous” for Pakistan and told CNBC on Monday: “The dream for Pakistan is that they can export to China. The reality for Pakistan is that they are exporting to the United States and Europe.”

Pakistan’s economic wealth has been largely linked to maintaining positive relations with the West, but Khan “acted against it, said Schwemmlein.

It is likely that the new Sharif government will adapt closer to the United States

China: Strategic ties

Pakistan had cultivated ties with both the United States and China as a way to overcome its security dilemma and maintain its balance of power with India, according to Shibani Mehta, a research analyst at Carnegie India.

“Because of its history with the United States and China, Pakistan needs them more than they need it,” Mehta said. “The United States showed little appetite for interfering in regional disputes. China’s motives are primarily rooted in a common vigilance and history of war with India; and commercial interests in Pakistan,” she said.

A change in Pakistan’s relationship with one or both will depend on the strategic goals of Washington and Beijing.

Shibani Mehta

Research Analyst, Carnegie India

“A change in Pakistan’s relationship with one or both will depend on the strategic goals of Washington and Beijing,” she added.

But Sevea pointed out that no matter who comes to power, it was the army that would continue to have a significant influence on Pakistan’s foreign policy.

“Given the concerns of the army over Imran Khan’s criticism of Pakistan’s relationship with the United States and the army chief’s claim about the importance of relations with the United States, it is likely that Sharif will try to return to a balancing act of the two,” he said. said.

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