Pakistan-IMF: Partnership Built on Dependence

In my recent reflections on Pakistan’s economic dilemmas, one truth stands out — our relationship with the IMF has never been economic, it has always been political. What began as assistance for growth soon turned into a calculated trap of dependency. The IMF didn’t reform Pakistan’s economy; it reprogrammed its sovereignty.

Pakistan’s long association with the IMF has never truly been about stability; it has been about control. What started in the name of “support” evolved into a vicious cycle of borrowing, serving both foreign powers and the ruling elite at home.

During the Cold War, IMF lending was less about economics and more about strategy. Pakistan’s geography made it a convenient pawn in Washington’s global game of containment. Loans came with neatly crafted “conditionalities,” but the real aim was to keep Pakistan’s economy tethered to Western influence.

The much-advertised structural reforms were cosmetic. Land reforms never touched the feudal elite, tax reforms spared the powerful, and privatization transferred wealth to cronies. Instead of fostering industrial growth, policies promoted consumer industries — assembling fast-moving consumer goods rather than producing capital or export goods. The result: an illusion of progress built on imports and consumption.

With every bailout, the dependency mindset grew stronger. The IMF was always available, and policymakers were always willing. A belief took root — that salvation lies in foreign help, not self-reliance.

After the Soviet invasion of Afghanistan in the late 1970s, Pakistan was declared a “frontline ally.” The US poured in funds and influence, effectively turning Pakistan’s economy into a Cold War instrument. IMF support neatly aligned with Washington’s geopolitical interests, ensuring compliance rather than reform.

Over the decades, this external control merged with internal manipulation. Regime changes — military or civilian — often bore foreign fingerprints. Today, the IMF stands not as a partner in reform but as a symbol of economic subservience — proof that Pakistan’s journey from aid to autonomy remains unfinished.

Pakistani Policies Turning Taliban Foe

The unraveling Pakistan–Taliban relationship highlights the limits of old security doctrines in a changing regional order.

When the Taliban returned to power in Kabul in 2021, Pakistan hoped for a friendly neighbor and a stable frontier. Four years later, that optimism has faded. Relations have soured, trust has eroded, and the Taliban’s growing warmth toward India signals how far Islamabad’s Afghan policy has drifted from reality.

Pakistan’s once-comfortable relationship with the Taliban is deteriorating — not because of ideology, but because of Islamabad’s own policy. What was once hailed as “strategic depth” is now fast becoming a strategic setback.

For decades, Pakistan believed that supporting the Taliban would ensure border security and limit Indian influence. But since the group’s return to power, those assumptions have collapsed.

Instead of cooperation, Pakistan now faces increasing hostility - frequent border clashes, defiant statements from Kabul, and a resurgent Tehrik-e-Taliban Pakistan (TTP) operating from Afghan soil.

The Taliban’s visible tilt toward India is a symptom of Islamabad’s stance. Pakistan has chosen pressure over diplomacy — closing key crossings, threatening to expel Afghan refugees, and publicly accusing Kabul of harboring militants.

These measures have not subdued the Taliban; they have driven them closer to New Delhi, which offers humanitarian aid and political legitimacy without direct interference.

The irony is stark. Pakistan, once the Taliban’s strongest backer, now finds itself isolated, while India — long regarded as an adversary in Afghan affairs — is quietly re-establishing presence in Kabul. The Taliban, in turn, are using this outreach to project independence and resist external dictates.

Islamabad’s Afghan policy remains trapped in outdated security thinking, viewing Kabul solely through the prism of control.

Unless Pakistan recalibrates its approach — replacing coercion with constructive engagement — it risks losing whatever influence it still retains. The “strategic depth” doctrine that once shaped policy has now turned dangerously shallow.

 

Is Pakistan Being Pushed into a ‘US Proxy War’ in Afghanistan?

Behind the new wave of border clashes may lie an old script — one written in Washington and played out in Islamabad and Kabul. Has Pakistan once again been cast in the role of America’s proxy?

The recent spike in Pak-Afghan border tensions has once again pushed the region to the edge of confrontation. Reports suggest that armed militants crossing from Afghanistan have attacked Pakistani security posts, prompting Islamabad’s “severe retaliation.” Yet, beneath the visible smoke of gunfire lies a far more intricate and disturbing reality — one that hints at the shadow of global power politics.

Following the US withdrawal from Afghanistan in 2021, Washington appeared to have lost its strategic foothold in the region. The Taliban’s refusal to hand over the Bagam Air Base — once a vital hub of American military operations — was not merely a symbolic rejection; it was a strategic rebuff. The superpower lost a vantage point near China, Iran, and Central Asia.

It is no coincidence that within months of that refusal, Afghanistan began facing renewed instability, and Pakistan started encountering an inexplicable surge in cross-border attacks.

My hypothesis is simple: when Washington cannot re-enter Afghanistan directly, it may seek to create circumstances that justify intervention. The most effective way to do that is to provoke conflict. The pattern fits. Anonymous “operators” — possibly non-state actors with advanced intelligence capabilities — carry out attacks inside Pakistan, inviting a retaliatory strike. The resulting escalation allows the US to portray the region as unstable and Taliban-controlled Afghanistan as a “global threat.” A familiar pretext for yet another intervention is thus created.

Ironically, Pakistan — which has already paid an enormous price in blood and economy during the first “War on Terror” — now risks being drawn into another one, this time as an unwilling participant in someone else’s geopolitical chessboard. The tragedy is that Islamabad still struggles to draw a clear line between its national interests and Washington’s regional ambitions. History, it seems, is repeating itself — and not for the better.

What complicates matters further is the deep mistrust between Islamabad and Kabul. The Taliban government, already under economic sanctions and political isolation, accuses Pakistan of toeing the American line. Pakistan, on the other hand, blames Afghanistan for harboring militants of the Tehrik-i-Taliban Pakistan (TTP). Yet neither side seems willing to see how external forces might be manipulating both.

The strategic question Pakistan must ask is: Whose war are we fighting this time? If recent cross-border provocations are indeed part of a larger plan to destabilize the region, Islamabad must avoid taking the bait. A measured, intelligence-based response — not blind retaliation — is the need of the hour. Pakistan’s security cannot depend on reaction; it must rest on foresight.

The lesson from the past two decades is painfully clear. Every time Pakistan has fought on behalf of someone else, it has lost — in lives, in reputation, and in internal cohesion. If history is repeating itself, the least we can do is refuse to play the same role again.

Saudi Support to Pakistan Beyond Diplomacy

Saudi Arabia and Pakistan share a relationship that is often described as “brotherly” rather than merely diplomatic. Rooted in faith, history, and mutual respect, the Kingdom’s support to Pakistan over the decades has been nothing short of exceptional. At every critical juncture—from wars and economic crises to natural disasters—Riyadh has stepped forward with generosity, affirming its role as Islamabad’s most trusted partner.

Historical Foundations of Brotherhood

Saudi Arabia was among the very first nations to recognize Pakistan after its independence in 1947. Since then, ties have been nurtured on shared Islamic values and common aspirations. The relationship quickly matured into a strategic alliance, with both nations backing each other in times of need. During Pakistan’s wars in 1965 and 1971, Riyadh extended strong political and moral support. Similarly, Pakistan stood firmly with the Kingdom during regional crises, cementing trust that has endured for generations.

Financial Lifelines in Times of Need

Perhaps the most visible manifestation of Saudi support has been on the economic front. Pakistan, a developing country often facing fiscal and balance-of-payment challenges, has repeatedly found in Riyadh a source of immediate relief.

In recent years alone, the Kingdom deposited billions of dollars in Pakistan’s State Bank reserves, providing crucial breathing space at a time when international institutions were either hesitant or demanded painful reforms. Oil supplies on deferred payment have cushioned Pakistan’s import bill, helping stabilize inflation and energy costs. Unlike Western lenders, Saudi assistance has rarely been tied to political or structural conditions, making it uniquely generous and timely.

This pattern is not new. Since the 1970s, Riyadh has offered concessional oil facilities, long-term loans, and grants to help Pakistan weather external shocks. Time and again, Saudi Arabia has proven to be Pakistan’s financial first responder.

Energy Security and Investment Potential

Saudi Arabia has also played a key role in Pakistan’s energy security. Its oil facilities have ensured that Pakistan’s economy continues to function even during periods of global energy volatility. Looking ahead, Riyadh has expressed strong interest in investing in Pakistan’s energy infrastructure, particularly in the proposed multibillion-dollar Gwadar Oil Refinery. Such projects not only promise to reduce Pakistan’s dependence on imported petroleum products but also strengthen its role as a regional energy hub.

Humanitarian Generosity and People to People Impact

The Kingdom’s generosity extends far beyond state to state transactions. During Pakistan’s worst humanitarian crises, including the devastating 2005 earthquake and the catastrophic floods of 2010 and 2022, Saudi Arabia was among the largest donors of aid. Relief goods, medical teams, and financial contributions directly helped millions of displaced and vulnerable citizens.

Saudi-funded development projects—ranging from schools and hospitals to water supply schemes—have left a lasting impact on communities across Pakistan. These initiatives reflect Riyadh’s recognition that real support lies not just in financial transfers but in uplifting the quality of life of ordinary people.

Strategic and Defense Cooperation

Defense and security cooperation remain another cornerstone of the relationship. Pakistani military personnel have long been involved in training Saudi armed forces, a partnership that has enhanced Riyadh’s defense capacity while deepening trust between the two establishments.

At the diplomatic level, Saudi Arabia has consistently stood by Pakistan on sensitive issues, particularly Kashmir. By lending its political weight to Islamabad’s positions at the Organization of Islamic Cooperation (OIC) and other global platforms, Riyadh has amplified Pakistan’s voice in the international arena.

Mutuality of Interests

Although Saudi Arabia’s exceptional support to Pakistan often takes the spotlight, the relationship is not one-sided. Pakistan has consistently extended manpower, expertise, and solidarity to the Kingdom. Millions of Pakistani workers in Saudi Arabia are a vital part of the Kingdom’s development, especially under Crown Prince Mohammed bin Salman’s Vision 2030. Their contributions not only drive Saudi progress but also sustain Pakistan’s economy through remittances that exceed billions of dollars annually.

In times of regional tension, Pakistan has also stood firmly with Riyadh, whether by providing military expertise or diplomatic support. This reciprocity underscores the fact that the partnership is built on mutual respect and shared strategic interests.

Looking Toward the Future

As the global order undergoes transformation, the Saudi-Pakistan relationship is poised to enter a new phase. Vision 2030, which seeks to diversify the Saudi economy beyond oil, opens new avenues for Pakistani professionals, investors, and skilled workers. Pakistan, with its youthful population and strategic location at the crossroads of South Asia, Central Asia, and the Middle East, remains a natural partner for Riyadh’s long-term ambitions.

Furthermore, investment in renewable energy, technology, agriculture, and infrastructure can redefine the contours of this relationship. What has historically been dominated by financial and defense cooperation is now broadening into sectors that will drive growth in the 21st century.

Exceptional Saudi support to Pakistan is not merely about financial bailouts or humanitarian aid. It is the reflection of a bond rooted in shared faith, tested by history, and strengthened by mutual benefit. For Pakistan, Saudi Arabia has been a dependable partner in times of uncertainty. For Riyadh, Islamabad remains a steadfast ally with strategic depth and human capital.

As both nations look ahead, their challenge is to transform this exceptional support into sustainable, future-oriented cooperation. By building on decades of trust, Saudi Arabia and Pakistan can not only uplift their own people but also set an example of solidarity and resilience for the wider Muslim world.

 

President Trump Gaza Belongs to Palestinians

US President Donald Trump is scheduled to meet leaders and officials from multiple Muslim-majority countries on Tuesday and discuss the situation in Gaza, which has been under a mounting assault from Washington's ally Israel.

White House Press Secretary Karoline Leavitt told reporters on Monday that Trump will hold a multilateral meeting with Saudi Arabia, the UAE, Qatar, Egypt, Jordan, Turkey, Indonesia and Pakistan.

Axios reported Trump will present the group with a proposal for peace and post-war governance in Gaza.

In addition to freeing hostages and ending the war, Trump is expected to discuss US plans around an Israeli withdrawal and post-war governance in Gaza, without Hamas involvement, according to Axios.

Washington wants Arab and Muslim countries to agree to send military forces to Gaza to enable Israel's withdrawal and to secure funding for transition and rebuilding programs, Axios reported.

Trump will address the UN General Assembly on Tuesday, a day after dozens of world leaders gathered at the United Nations to embrace a Palestinian state, a landmark diplomatic shift nearly two years into the Gaza war that faces fierce resistance from Israel and the United States.

The nations said a two-state solution was the only way to achieve peace, but Israel said the recognition of a Palestinian state was a reward to extremism.

Israel's assault on Gaza since October 2023 has killed tens of thousands, internally displaced Gaza's entire population, and set off a starvation crisis. Multiple rights experts, scholars and a UN inquiry assessed it amounts to genocide.

Israel calls its actions self-defense and has also bombed Iran, Lebanon, Yemen, Syria and Qatar during the course of its war in Gaza.

Trump had promised a quick end to the war in Gaza, but a resolution remains elusive eight months into his term.

In February, Trump proposed a US takeover of Gaza and a permanent displacement of Palestinians from there. It was labeled as an "ethnic cleansing" proposal by rights experts and the United Nations. Forcible displacement is illegal under international law. Trump cast the plan as a re-development idea.

What options US can exercise if Afghans refuse to handover Bagram Air Base?

If Afghans refuse to handover Bagram Air Base back to the United States, Washington is likely to face a serious strategic dilemma. The response will likely depend on how far the super power is willing to push its military and political leverage in the region. Some of the likely options are:

1. Diplomatic Pressure

The first option would be to apply diplomatic pressure on the Taliban government, possibly through Qatar or Pakistan as intermediaries. The US may frame Bagram’s access as essential for counterterrorism monitoring, and push for a limited presence under international arrangements rather than outright US control.

2. Economic and Sanctions Leverage

If diplomacy fails, Washington could use financial levers that include:

Tightening sanctions on Taliban leaders.

Blocking international recognition of the Taliban government.

Cutting off humanitarian exemptions or aid that Afghanistan relies on.

This would make Kabul’s refusal costlier.

3. Regional Partnerships

The US might deepen military partnerships with neighbors instead. For instance:

Expanding use of bases in Central Asia (though Russia and China will resist this).

Strengthening presence in the Persian Gulf (Qatar, UAE).

Increasing over-the-horizon operations using drones and satellites.

This would reduce dependency on Bagram, though at a higher logistical cost.

4. Covert Operations

If Washington views Bagram as critical for counterterrorism, it could resort to covert methods—arming rival Afghan groups, intelligence penetration, or even destabilization strategies to pressure the Taliban into concessions.

5. Accept and Adapt

Though difficult, the US may accept that Afghanistan is now firmly outside its reach and adapt by monitoring from afar. This would reflect Washington’s reluctance to re-engage militarily in Afghanistan after two decades of war.

From RCD to ECO to Complete Dormancy

Regionalism has often been hailed as a path toward prosperity, but the trajectory of the Regional Cooperation for Development (RCD) and its successor, the Economic Cooperation Organization (ECO), tells a sobering story of missed opportunities. What began with promise in the 1960s has today slipped into near-complete irrelevance.

The RCD was founded in 1964 by Iran, Pakistan, and Turkey to strengthen economic, cultural, and technical cooperation. It emerged in a Cold War environment, where smaller powers sought to shield themselves from great-power dependency by building regional linkages.

On paper, the project had logic, three strategically located Muslim countries, with shared aspirations of modernization, pooling resources to advance trade, industry, and connectivity. In practice, RCD never went beyond symbolism.

The organization lacked institutional strength, faced political frictions, and struggled to overcome the dominance of external economic ties over intra-regional trade.

By the late 1970s, the Iranian Revolution and shifting geopolitical alignments sealed RCD’s fate. In 1979, it faded into history without leaving a substantial legacy.

A revival attempt came in 1985, when the same three countries launched the Economic Cooperation Organization (ECO). ECO promised a fresh start and greater ambition. Its major breakthrough came in 1992 with the admission of seven new members — Afghanistan, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

ECO spanned a vast geography bridging South, Central, and West Asia, with a market of nearly half a billion people and immense natural resources.

Observers predicted that ECO could become a Eurasian economic powerhouse, knitting together landlocked Central Asia with energy-rich Iran and Turkey, and consumer-rich Pakistan.

As decades passed, the promise remained unfulfilled. Member states pursued conflicting foreign policies, were more deeply tied to external trade partners than to each other, and often lacked political trust. Infrastructure gaps meant goods could not move freely.

Overlapping memberships — in the OIC, SCO, CIS, and other blocs — diluted ECO’s relevance.

High-sounding declarations at summits were rarely followed by implementation. Even flagship projects, such as the Islamabad-Tehran-Istanbul railway, never became viable trade corridors.

Today, ECO exists largely as a ceremonial body. Meetings are infrequent, agreements unenforced, and the organization invisible in global or even regional affairs.

Intra-ECO trade remains stuck around 7–8% of members’ total trade, a telling indicator of stagnation.

Compared to other regional blocs such as ASEAN or the EU, ECO demonstrates how political will, not geography, determines success.

The journey from RCD to ECO to dormancy offers a lesson ‑ regional cooperation cannot survive on rhetoric alone. Without trust, shared vision, and consistent follow-through, even the most promising initiatives collapse into irrelevance.

ECO still retains potential — its geography places it at the crossroads of major trade routes, including China’s Belt and Road Initiative. But unless member states move beyond statements and invest in genuine integration, ECO’s story will remain one of unrealized potential and organizational decay.

 

 

President Trump you cannot order Taliban to handover Bagram Air Base to the United States

It may be a wish of US President Donald Trump to get control of Bagram Air Base. However, he does not have any authority to demand the Afghan government to handover the base. Threatening bad things would happen to Afghanistan if it does not give back control of the base to the United States, is outright terrorism.

Here are several possible motives behind the Trump demand:

·        Restoring US influence in Afghanistan and the wider region, especially after the pull-out which many view as a strategic loss.

·        Countering rivals, particularly China and others by having a base close by.

·        Strengthening counterterrorism posture, ensuring that militant groups can't easily use Afghan territory to plan or launch attacks.

·        Leveraging domestic political pressure as the opponents say the withdrawal decision was a mistake.

·        Using it as a bargaining chip to secure concessions i.e. economic aid, diplomatic recognition, etc.

Being a sovereign county and also because the US does recognize the Taliban government of Afghanistan it is the inherent right of Taliban to outright rejected the US demand.

·        They rightly say Afghanistan’s territorial integrity cannot be compromised.

·        No foreign military presence will be allowed.

·        Taliban insists that political and economic relations with the US are possible without giving up land or allowing foreign bases.

Regaining control of Bagram will not an easy task for the US. It would likely require a major military deployment, security provisions, defense spending, etc. Experts say holding the base would be challenging militarily and politically.

Some analysts view the US demand as an attempt to restore hegemony over Afghanistan and adjoining countries.

They warn that pushing too hard might destabilize relations, reduce cooperation, or provoke negative responses from locals or other countries.

Under the Doha Agreement (2020) and other engagements, the US made certain commitments about respecting Afghanistan’s sovereignty, no foreign bases, etc. Returning to or demanding possession of Bagram is violation of these agreements.

Significance of Saudi Arabia-Pakistan defence pact

The Saudi Arabia-Pakistan defence pact is not just a military arrangement—it is a strategic partnership that underpins Pakistan’s economic security and Saudi Arabia’s military security. For Pakistan, it guarantees vital financial and diplomatic backing; for Saudi Arabia, it provides trusted military support and, indirectly, a nuclear-armed ally. Together, it represents one of the strongest security relationships in the Muslim world.

The Saudi Arabia- Pakistan defence pact carries deep strategic, political, and economic significance for both countries and the wider region. Its importance can be seen from multiple angles:

Strategic and Security Dimension

Mutual Security Guarantee:

Pakistan has historically provided military training, expertise, and manpower to Saudi Arabia, reinforcing the Kingdom’s defence at times of regional tension. In return, Saudi Arabia has been a security partner for Pakistan in times of external pressure.

Balancing Iran’s Influence:

For Saudi Arabia, Pakistan’s military cooperation is part of a broader strategy to counterbalance Iran in the Gulf and beyond. For Pakistan, it ensures strong backing from the Kingdom while maintaining a delicate balance in its own relations with Iran.

Nuclear Umbrella:

Although not formalized, Pakistan’s nuclear capability is sometimes seen as a potential backstop for Saudi security in case of existential threats, making the defence relationship symbolically powerful.

Military Cooperation

Training and Deployment:

Thousands of Pakistani military personnel have served in Saudi Arabia over the decades, providing training to Saudi forces. Even today, a contingent of Pakistani troops is stationed there for defence cooperation.

Arms and Defence Technology:

Pakistan has supplied small arms, ammunition, and defence equipment to Saudi Arabia. Joint ventures in defence production are under discussion.

Counterterrorism and Intelligence Sharing:

Both states have collaborated closely in intelligence sharing, counterterrorism operations, and combating extremist networks that threaten regional stability.

Economic and Political Significance

Financial Lifeline for Pakistan:

Saudi Arabia has been one of Pakistan’s most consistent financial supporters—providing oil on deferred payments, direct loans, and balance-of-payments support. The defence pact strengthens this bond by ensuring Pakistan’s military commitment in return.

Diplomatic Support:

Saudi Arabia often champions Pakistan’s stance on international platforms, including on Kashmir and economic cooperation within the OIC. Pakistan reciprocates by supporting Saudi positions on regional security and Islamic solidarity.

Regional and Global Context

Gulf Security:

Saudi Arabia views Pakistan as a reliable partner in securing the Gulf, especially in moments of instability.

Islamic Military Alliance:

Pakistan plays a central role in the Saudi-led Islamic Military Counter Terrorism Coalition (IMCTC), with former Pakistani Army Chief Gen. Raheel Sharif appointed as its first commander.

US–China Factor:

The pact also gives Saudi Arabia an alternative to over-reliance on Western defence support, while Pakistan uses it to diversify its security partnerships alongside China.

Symbolic and Religious Aspect

Custodianship of Holy Places:

Pakistan attaches special reverence to Saudi Arabia as the custodian of Islam’s holiest sites, and defence cooperation is also framed as protecting the sanctity of the Two Holy Mosques.

Soft Power and Legitimacy:

The pact signals unity of two major Muslim powers—Saudi Arabia with its economic and religious clout, and Pakistan with its military strength and nuclear capability.

Saudi Arabia and Pakistan sign defence pact

According to Reuters, Saudi Arabia and nuclear-armed Pakistan have signed a formal mutual defense pact on Wednesday, in a move that significantly strengthens a decades-long security partnership amid heightened regional tensions.

The enhanced defense ties come as Gulf Arab states grow increasingly wary about the reliability of the United States as their longstanding security guarantor. Israel's attack on Qatar last week heightened those concerns.

"This agreement is a culmination of years of discussions. This is not a response to specific countries or specific events but an institutionalization of longstanding and deep cooperation between our two countries," a senior Saudi official told Reuters when asked about its timing.

Israel's attempt to kill the political leaders of Hamas with airstrikes on Doha, while they were discussing a ceasefire proposal that Qatar is helping to mediate, infuriated Arab countries.

The pact could shift the strategic calculus in a complex region. Allies of Washington, Gulf monarchies have sought to stabilize ties with both Iran and Israel to resolve longstanding security concerns.

But the Gaza war has upended the region and Gulf state Qatar has been subjected to direct hits twice in a year, once by Iran and once by Israel.

The senior Saudi official, who spoke on condition of anonymity, acknowledged the need to balance relations with Pakistan's rival, India, also a nuclear power.

"Our relationship with India is more robust than it has ever been. We will continue to grow this relationship and seek to contribute to regional peace whichever way we can."

Asked whether Pakistan would be obliged to provide Saudi Arabia with a nuclear umbrella under the pact, the official said, "This is a comprehensive defensive agreement that encompasses all military means."

Pakistani state television showed Pakistani Prime Minister Shehbaz Sharif and Saudi Crown Prince Mohammed bin Salman, the kingdom's de facto ruler, embracing after signing the agreement. In attendance was Pakistan's army chief, Field Marshal Asim Munir, regarded as the country's most powerful person.

"This agreement, which reflects the shared commitment of both nations to enhance their security and to achieving security and peace in the region and the world, aims to develop aspects of defense cooperation between the two countries and strengthen joint deterrence against any aggression. The agreement states that any aggression against either country shall be considered an aggression against both," a statement from the Pakistani prime minister's office said.

Significance of Pezeshkian’s visit to China

Iranian President Masoud Pezeshkian wrapped up a four-day visit to China on Wednesday, heading back to Tehran after attending a military parade in Beijing that marked 80 years since the end of World War II.

Pezeshkian's first stop in China was the northern port city of Tianjin, where he attended the 25th Meeting of the SCO Council of Heads of State, the largest gathering of the bloc to date. The Iranian president delivered a speech there, addressing the "unfair" global order led by the West and highlighting the need to create a new one through collaboration among the Global South.

A much-anticipated meeting between the presidents of Iran and China took place the next day. Pezeshkian told Xi Jinping that Iran was ready to work with China "under any circumstances" to elevate relations to their highest level, stressing that Beijing could count on Tehran as a "strong and determined friend and ally." Xi reciprocated, stating he sees Tehran as a "strategic partner" with a "forward-looking approach." Both sides agreed that more needed to be done to implement the 25-year cooperation plan signed in 2020.

Analysts in Iran hope that the president’s visit, during which he was accompanied by his foreign minister, economy minister, and defense minister, would lead to new military and financial deals.

This appears to be the case, as upon arriving in Tehran, Pezeshkian stated that "important," "strategic," and "vital" decisions had been made following his discussions with Xi.

"Additionally, discussions on security and defense equipment were held with the support of the defense minister, who was present during this trip, and necessary follow-ups will be carried out in this regard," Pezeshkian declared. It is believed that Iran is looking to buy air defense systems and fighter jets from China, although there is no official confirmation on what it seeks to purchase.

While Iranians have mostly focused on what the trip could bring about for Iran, the rest of the world has mainly been discussing how the SCO summit and the close interaction between India's Modi and Xi demonstrate that the split President Trump opened up between Washington and New Delhi is much larger than expected.

Trump’s former security advisor told American media that Trump has “shredded decades of effort” to pull India away from the Russian and Chinese orbit with his tariff policies. 

Furthermore, Modi's presence at the recent SCO meeting, along with other developments, is viewed as a sign that the new global order Pezeshkian has called for is approaching, or may already be in place.

"The new international order everyone has been talking about for years has almost arrived," said economic and trade analyst Majid Shakeri.

The expert said several factors point to this consolidation include: 1) the exclusion of Arab states from the Wednesday parade after their embrace of Trump during his West Asia tour earlier this year, 2) the Siberian Power Pipeline agreement signed between Russia and China this week, 3) and Beijing's announcement of its intention to establish an artificial intelligence cooperation center with the rest of the SCO.

"A crucial piece of the puzzle that is still incomplete and unclear is India's balancing act between China and America," Shakeri explained.

Pezeshkian's visit to China also included significant interactions with other world leaders. While there appeared to be no interaction with the Indian Prime Minister, Pezeshkian spent four hours in discussion with Russia's Vladimir Putin and a shorter amount of time speaking with Pakistan's Shehbaz Sharif, whose country's relationship with Iran is growing closer by the day.

Recep Tayyip Erdogan of Turkey was filmed holding onto Pezeshkian's hand while walking alongside him in a hall. The Iranian president expressed anticipation for Erdogan's visit to Tehran.

Despite recent tensions between Iran and Turkey regarding South Caucasus transportation plans and the situation in Syria, both nations appear in favor of maintaining their friendly relations.

Tajikistan’s Emomali Rahmon was also affectionate with Pezeshkian. The two countries share a significant part of their history and culture and view each other fondly.

 

India alerts Pakistan about possible flood

Despite strained relations following the May 2025 standoff, India has formally alerted Pakistan about a potential flood in the River Tawi at Jammu that could affect the Pakistani territory.

According to a senior official, the Indian High Commission in Islamabad contacted the Foreign Office at 10am on Sunday, cautioning about a “significant flood situation.”

This marks the first major communication between the two countries since the May conflict, when bilateral ties deteriorated sharply.

Officials emphasized that the exchange was in line with the Indus Waters Treaty, which obliges both sides to share data on river flows and flood forecasts during the monsoon season.

Following the alert, the Government of Pakistan issued warnings to all relevant federal and provincial departments, including the National Disaster Management Authority (NDMA), irrigation departments and military engineering units.

The 1960 Indus Waters Treaty requires India and Pakistan to share flood-related data to help protect downstream communities and minimize damage from natural disasters.

While tensions remain high, officials described India’s latest move as a “positive gesture” under the treaty framework. The spokesperson for the Ministry of Foreign Affairs was unavailable for comment.

 

Iran-Pakistan set ambitious agri trade target

Iran and Pakistan signed a joint statement pledging to expand cooperation in agriculture, trade, and food security, with a goal to raise bilateral agricultural trade to US$3 billion within two years.

Iran’s Agriculture Minister Gholamreza Nouri Ghezeljeh said current trade is around US$1.4 billion, noting both countries’ complementary strengths.

Iran will expand exports of dairy, nuts, fruits, and vegetables, while Pakistan will supply rice, corn, and 60% of Iran’s meat imports.

Both sides also agreed to collaborate on climate change research, food security, and establish a joint agricultural committee to meet biannually.

Pakistan’s Minister Rana Tanveer Hussain called the Tehran meeting “fruitful,” stressing that regional trade is cheaper than sourcing from distant markets like Brazil.

Both public and private sectors will participate, with barter and tailored facilities under consideration.

The Iran–Pakistan Business Conference opened in Islamabad on August 03, attended by President Masoud Pezeshkian and hosted by Senator Ishaq Dar.

Pakistan’s Commerce Minister Jam Kamal Khan highlighted the draft Free Trade Agreement, tariff issue resolution, and improved border infrastructure, including activation of the Pishin–Mand market and plans for a new Chadgi–Kouhak crossing.

Iran’s Trade Minister Mohammad Atabak emphasized the need to expand land terminals, rail connectivity, and port cooperation.

Dar underlined close ties under the Economic Cooperation Organization (ECO) and invited Iranian investors to Pakistan, citing reforms and a new investment facilitation council.

Reza Masrour, head of Iran’s Free Trade and Special Economic Zones, proposed joint paddy farming in Pakistan with rice processing in Iran’s Chabahar Free Zone to address water shortages.

He also suggested multi-entry visas, a joint free zone, and linking CPEC to Iran and the North–South Corridor. Pakistan welcomed these ideas.

According to Iran’s Trade Promotion Organization, trade reached US$3.129 billion in 2024–25, with Iran exporting US$2.423 billion (mainly petroleum products, milk powder, and dates) and importing US$706 million (primarily rice, oilseeds, and meat). However, trade in early 2025 dipped due to regional instability.

Officials stressed that better logistics, customs cooperation, and transport infrastructure are vital for sustaining growth and realizing the long-delayed promise of free trade.

US-Pakistan strategic cooperation

Secretary of State Marco Rubio said Washington looked forward to exploring cooperation with Pakistan on critical minerals and hydrocarbons, with his comments coming in a statement issued by the State Department on Pakistan's Independence Day.

Washington and Islamabad hailed a trade deal last month, which Pakistan said would result in lower tariffs and increased investment.

Pakistan's Commerce Minister Jam Kamal has said Islamabad will offer US businesses opportunities to invest in mining projects primarily in the southwestern Baluchistan province through joint ventures with local companies, providing concessions such as lease grants.

The province is home to key mining projects, including Reko Diq, run by mining firm Barrick Gold and believed to be one of the world's largest gold and copper mines.

"We look forward to exploring new areas of economic cooperation, including critical minerals and hydrocarbons, and fostering dynamic business partnerships," Rubio said late on Wednesday.

"The United States deeply appreciates Pakistan's engagement on counterterrorism and trade."

Before President Donald Trump's administration, Islamabad's relationship with Washington had cooled in recent years, as the US drew closer to Pakistan's traditional adversary India to counter China's rise, among other factors.

Washington also resented Islamabad over Afghanistan, especially under former President Joe Biden's administration, which oversaw a chaotic withdrawal from Afghanistan and the takeover of the country by the Taliban insurgency that Washington accused Islamabad of backing. Pakistan denied the charge.

In recent months, Washington's ties with Islamabad have improved. Trump took credit for a ceasefire between India and Pakistan after the Asian neighbors engaged in hostilities in May following an April attack in India-administered Kashmir.

Pakistan praised Trump while India maintained that New Delhi and Islamabad should resolve their issues directly without outside involvement.

The US and Pakistan held the latest round of counterterrorism talks in Islamabad on Tuesday. Washington has designated separatist militant group Baluchistan Liberation Army as a "foreign terrorist organization."

"The US-Pakistan counterterrorism dialogue joint statement is one of the most positive and effusive I've seen from these two countries on CT for quite a few years," Michael Kugelman, a Washington-based South Asia analyst and writer for Foreign Policy magazine, said.

 

PSX benchmark index up 3.08%WoW

Pakistan Stock Exchange (PSX) sustained its bullish momentum throughout the week on anticipation of strong earnings during the ongoing results season. The benchmark index touched its all-time high closing at 145,647 points on Thursday, but closed the week at 145,383 points, up 4,348 points, up 3.08%WoW, with meager decline in the last trading session.

Market participation improved with average daily traded volume increasing by 16.3%WoW to 653 million shares, up from 561 million shares a week ago.

Trade deficit for the month of July 2025 rose to US$2.8 billion, up 44%YoY.

Workers’ remittances for July 2025 also rose to US$3.2 billion, up 7%YoY.

Foreign exchange reserves held by State Bank of Pakistan (SBP) decreased by US$72 million to US$14.2 billion as of August 01, 2025.

Key sectoral developments included robust 30%YoY growth in cement dispatches for July 2025, while OMC offtakes reached 1.2 million tons, up 2% YoY.

On the international front, the Trump administration imposed an additional 25% tariff on India, raising reciprocal tariffs to 50%.

Other major news flow during the week included: 1) Pakistan gets 19% tariff after US drives a hard bargain, 2) SBP enhances housing finance limit for microfinance borrowers to PKR5 million, 3) ExxonMobil likely to come back for offshore venture, 4) Pakistan set to initiate dialogue with Qatar on LNG supplies, and 5) Budget deficit drops to 5.4% in FY25 from 6.8% for the same period last year.

Woollen, Jute, insurance, Tobacco, and Food & Personal Care were amongst the top performing sectors, while Synthetic & Rayon, Close-end Mutual Funds, Chemical, Sugar & Allied Industries, and Textile Weaving were amongst the laggards.

Major selling was recorded by Banks/ DFI with a net sell of US$18.8 million. On the other hand, Mutual Funds absorbed most of the selling with a net buy of US$22.9 million.

Top performing scrips the week were: AGL, NESTLE, UNITY, HBL, and BNWM, while the laggards included: GADT, PKGP, FABL, LCI, and IBFL.

According to AKD Securities, the market is expected to remain positive in the coming weeks, with further developments over circular debt expected to drive the market along with upcoming corporate results remaining in the limelight.

The benchmark index is anticipated to sustain its upward trajectory, with a target of 165,215 points by end December 2025, primarily driven by strong earnings in Fertilizers, sustained ROEs in Banks, and improving cash flows of E&Ps and OMCs, benefiting from falling interest rates and economic stability.

The top picks of the brokerage house include OGDC, PPL, PSO, FFC, ENGROH, MCB, FCCL, KOHC, INDU, and SYS.

Pleasing Trump may annoy Saudi Arabia

Energy diversification is smart, but foreign policy tact is essential.

Importing US crude oil may please US President Donald Trump, but it could also annoy Saudi Arabia, especially given the special relationship between Pakistan and the Kingdom, which includes:

Long standing energy ties
Saudi Arabia is Pakistan’s largest crude oil supplier, often providing oil on deferred payment (US$3 billion oil credit facility renewed multiple times).

Financial assistance
Saudi Arabia has provided billions in loans, deposits, and grants to support Pakistan’s economy, particularly during IMF negotiations.

Strategic alignment
The Saudi-Pakistan relationship is not just economic but also political and military, including defense cooperation and labor remittances.

Though, to begin with import of crude oil from United will be small, the move could strain ties between Pakistan and Saudi Arabia.

Geopolitical optics
Importing US crude might be seen as Pakistan pivoting westward, especially if framed as part of a larger US trade deal.

Loss of market share

Even a 10% reduction in demand from a long-time buyer like Pakistan might raise commercial and symbolic concerns.

Trust and alignment issues

If the decision isn't communicated diplomatically, Riyadh may perceive it as ungrateful, especially if deferred payment oil continues.

Not necessarily a rupture

Scale is limited
Pakistan is not replacing Saudi oil. The pilot phase is just 10% of imports. It's a diversification move, not a shift in allegiance.

Economic logic
The US crude provides lighter grades and higher gasoline yield, improving domestic refining output. If positioned as a technical decision, it’s easier to justify.

Diplomatic communication
Pakistan can explain this as part of energy diversification—a common practice by many countries—and reaffirm its strategic ties with Riyadh.

Pakistan should do:

Step	Why it matters
Engage Saudi leadership in advance	Avoid surprises and reassure that US crude is a supplement, not a replacement
Reaffirm oil diplomacy	Continue or even expand the deferred payment arrangement with Saudi Arabia
Highlight refining needs	Explain that lighter crude grades improve fuel mix, not reduce strategic ties
Balance optics	Avoid appearing to pivot entirely toward US or using this purely as a bargaining chip in US trade diplomacy

 

Bottom Line

Importing US crude could cause diplomatic unease in Saudi Arabia—especially if it's perceived as Pakistan drifting from its long-standing partner. But the impact can be minimized through: 1) Transparent diplomacy, 2) Economic rationale, and 3) Strategic reassurance

 

Should Pakistan Import US Crude Oil?

Deciding whether Pakistan should import crude oil from the United States depends on multiple strategic, economic, and diplomatic factors. Here’s a balanced assessment based on the latest data and projections:

Pakistan is slated to take delivery of its first-ever US crude oil, one million barrel cargo of light WTI crude from Vitol, expected to arrive in October 2025 at Cnergyico’s refinery in Karachi. This marks a pilot spot cargo—if successful, Cnergyico may import one cargo per month thereafter

The move is part of a broader US–Pakistan trade agreement focused on oil and energy cooperation, and to mitigate threatened 29% tariffs on Pakistani exports.

Advantages of US Crude Imports

Energy source diversification
Breaking reliance on Middle Eastern suppliers - Saudi Arabia and UAE)—who currently account for nearly all of Pakistan’s crude oil imports—enhances energy security and geopolitical flexibility.

Refinery compatibility
Pakistan's largest refinery can process WTI Midland and cactus grades without blending adjustments and may boost gasoline/ middle distillate production, easing import reliance on refined products.

Trade diplomacy tool
Importing US crude may be used strategically in tariff negotiation, potentially lowering or avoiding the 29% US duty on Pakistani exports by helping balance trade flows.

Challenges and Risks

Higher logistics cost
Freight, insurance, and handling add around US$3 per barrel compared to regional supplies. This higher cost may strain forex reserves unless oil price spreads narrow.

Foreign exchange pressure and inflation

Larger import bill could put pressure on currency reserves and stoke inflation, especially if fuel prices are subsidized domestically.

Limited climate if not managed well
US imports should be a strategic supplement rather than a primary sourcing route, since over-dependence on long-distance crude can worsen trade and fiscal balances.

Key Considerations

Factor	Rationale
Volume	Target of 10% of total crude imports, around US$ one billion annually
Pricing Arbitrage	WTI's lighter quality and higher gasoline yield might offset additional logistics cost, assuming favourable price spreads
Refinery Capacity	Cnergyico’s SPM-equipped 156,000 bpd plant is record-compatible; no major technical hurdles noted
Strategic Diplomacy	The imports offer Pakistan leverage in US tariff negotiations and broader market access

The logical reply is that as part of a broader strategy Pakistan should import US crude oil. Use it to boost export negotiation leverage with the US. Diversify sources to improve energy resilience. Leverage light US crude to enhance domestic fuel yields.

Tread carefully

Limiting imports to a test/ pilot phase to assess cost, logistics, and yield economics. Monitoring global price differentials—if WTI premiums shrink relative to Gulf crude, US imports may become more viable long-term. Avoiding overreliance—continue importing most crude from Gulf suppliers with more favorable logistics and financing terms.

Moral of the story

Pakistan is entering a strategic test phase, set to receive one million barrels of US WTI oil in October 2025. If successful, limited monthly imports (10%) can support export negotiations, diversify supply, and potentially improve gasoline yields—even at some added logistical cost. However, unless price arbitrage improves, US crude should remain a tactical supplement, not replace traditional Gulf suppliers.

Significance of Iranian President's visit to Pakistan

The world knows that Iran was the first country to recognize Pakistan’s independence in 1947 and open its embassy in Karachi, which was then the capital of Pakistan. Likewise, Pakistanis were the first to officially recognize the victory of the Islamic Revolution in Iran in 1979.

The people of both countries share cultural, linguistic, historical, and religious ties, and have supported each other in both bitter and sweet moments throughout history. The cultural commonalities between the two nations are such that citizens of either country do not feel estranged or alien when traveling to the neighboring country.

In Tehran, prominent places such as Mohammad Ali Jinnah Highway and Pakistan Street exist. Likewise, in major Pakistani cities, including Karachi, street signs bearing names like Iran Avenue and streets named after Iranian poets like Ferdowsi, Saadi, Hafez, Khayyam, and others can be found.

Islamabad, the capital of the Islamic Republic of Pakistan, hosted Dr. Pezeshkian, President of Iran, and his accompanying delegation from August 02 to 03, 2025. This was, in fact, Pezeshkian’s first official visit to Pakistan since winning Iran’s 14th presidential election.

It is worth noting that in April 2024, the martyred Ayatollah Raisi also made a three-day visit to Pakistan, including the cities of Lahore, Karachi, and Islamabad, where he was warmly welcomed by the people and officials of that country. Following the helicopter crash and martyrdom of Ayatollah Raisi and his companions, Prime Minister Shehbaz Sharif of Pakistan, along with other officials, traveled to Tehran to pay their respects and attend the memorial ceremony.

In May of this year, Shehbaz Sharif once again visited Tehran to express his gratitude for Iran’s stance regarding the India-Pakistan war. Therefore, Dr. Pezeshkian’s recent visit was in response to Shehbaz Sharif’s invitation and, essentially, a reciprocation of his visit to Tehran.

Dr. Pezeshkian began his official visit in Lahore, the capital of Punjab province, by paying respects at the mausoleum of Allama Iqbal, the Pakistani philosopher and poet. It is said that over 8,000 verses of Iqbal’s poetry comprising 70% of his total works are written in Persian.

During the continuation of the visit in Islamabad, the Iranian delegation met with the Prime Minister, President, Foreign Minister, Army Chief, Speakers of the Senate and National Assembly, and Pakistani business community, seeking to implement the "Neighbor First" policy in practice. 

The current volume of annual trade between the two countries is about US$3 billion, yet many economic and commercial potentials remain untapped. During this recent visit, 12 cooperation agreements were signed in areas such as transportation, science and technology, tourism, and free trade, which, if implemented, could significantly boost bilateral relations.

One indicator of strong political relations is the frequent travel of officials between countries. In less than two years, top officials from Iran and Pakistan have visited each other’s countries four times, not including the meetings held on the sidelines of key regional and international summits. These frequent meetings highlight the close bond and significance of the relationship particularly now, when there is a growing need to expand cooperation.

Over the past few decades, Iran-Pakistan relations have enjoyed relative stability, and mutual visits and exchanges between officials have been a regular occurrence. What gives special importance to the recent presidential visit to Pakistan is the unique political situation and the developments that have taken place in recent months in South and West Asia and even globally.

The four-day war between India and Pakistan in May 2025, as two nuclear powers, created a highly sensitive situation in the region. Although brief, the consequences of this conflict continue to affect both countries and the broader region and world.

Additionally, the ongoing war and genocide in Gaza have significantly influenced global politics. In this context, the stances of Islamic countries such as Iran and Pakistan are of great importance. Tehran and Islamabad have consistently adopted shared, firm positions and have emphasized full support for the Palestinian cause. The 12-day imposed war by Israel on Iran drastically altered the geopolitics of the region and the Islamic world.

Pakistan’s positions as one of the largest and most influential Muslim nations and a nuclear power have been crucial, and the Iranian public and officials have always appreciated Pakistan’s brave and brotherly stance.

Islamabad's officials have expressed their appreciation, in various ways, for Iran’s goodwill and initiative in offering to mediate between the two countries, and for the highly important visit of Iran’s Foreign Minister Dr. Araghchi to Pakistan and India to reduce the tensions.

A key factor linking Iran and Pakistan’s foreign policies is the sensitivity of public opinion in both nations toward the Palestinian issue and their mutual opposition to Zionist occupation and crimes in Gaza. This shared stance is rooted in the principled policies laid down by the founding leaders of both nations, Imam Khomeini and Muhammad Ali Jinnah and continues today. Currently, there is deep concern over the joint illegal actions of the Zionist regime and the United States against Iran’s nuclear facilities, and the potential for similar scenarios to be repeated elsewhere.

The condemnation of the Zionist regime’s aggressive attack on Iran by Pakistan’s permanent representative at the UN Security Council, as a non-permanent member and rotating president, was well-received. Pakistan’s support for dialogue and negotiation and its affirmation of Iran’s right to nuclear knowledge were also reflected in the joint press conference held by Shehbaz Sharif and Dr. Pezeshkian.

Iranian and Pakistani officials have come to a shared understanding that the 900 plus km border between the two nations should transition from being a security border to an economic one. The two sides have created joint mechanisms to improve coordination in the fight against terrorism. There exists an ocean of untapped potential in both countries, which requires serious political will to activate. The travel of hundreds of thousands of Pakistani pilgrims as part of religious tourism is one such opportunity.

Currently, two land borders at Rimdan and Mirjaveh are operational, facilitating travel for tourists and traders. Strengthening infrastructure is essential for increasing travel between the two peoples. People-to-people ties and citizen interactions can play a critical role in raising awareness of each other’s capabilities. 

Meeting mutual needs given that the two economies complement each other should be a top priority for private sectors and businesspeople in both nations. Much of what Iran imports from other countries is easily accessible in Pakistan, and Pakistan exports goods that Iranians also import from various sources.

Pakistan can meet many of its needs through Iranian producers and benefit from the proximity and low logistics costs. There is an urgent need to upgrade the joint Iran-Pakistan Chamber of Commerce to play a more significant role.

An Iranian proverb says, “A good neighbor is better than a distant relative.” Pakistan is both a good neighbor and a good relative and we Iranians are grateful for this valued neighbor.

Courtesy: Tehran Times