BRICS uncertainty provides Pakistan opportunity to strengthen ties with West

ISLAMABAD -- Pakistani foreign policy analysts and economists are advising Islamabad to refrain from seeking ties with the economic bloc known as BRICS, which last week announced it would begin expanding starting January 1.

Instead they advocate for continuing to strengthen ties with the United States, and to focus on security, trade and technology collaboration.

At the conclusion of a summit in Johannesburg last Thursday (August 24), BRICS -- Brazil, Russia, India, China and South Africa -- announced that they had invited Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE) to join the bloc.

More than 20 countries had formally applied to join and about the same number from non-Western nations across the so-called Global South have expressed interest.

Pakistan has not submitted any formal application to join BRICS, an official told The Express Tribune last Wednesday.

The official also said it is too early to form any conclusion about the future of the group, as BRICS itself has yet to evolve a consensus on the expansion plan.

"As of now, I can say there is no discussion from the Pakistani side," the official added.

Following the announcement, Egypt, Ethiopia, Iran and the UAE broadcast their readiness to work with the loosely defined group.

But Argentina's membership is in doubt as the country's two main opposition presidential candidates in the upcoming October elections said they would not allow the country to join the bloc.

And Saudi Arabia's response was noncommittal, with Foreign Minister Prince Faisal bin Farhan saying Riyadh was "awaiting details" about the invitation and would "take the appropriate decision."

Some 50 world leaders attended the summit. Russian President Vladimir Putin did not attend in person because of an International Criminal Court arrest warrant on charges of war crimes in Ukraine.

Navigating geopolitical tensions

Pakistani analysts advising Islamabad to avoid involvement with BRICS have cited its anti-Western agenda.

"Refraining from BRICS membership allows Pakistan to navigate the current geopolitical tension ... between the United States and the China-Russia alliance," said Kashif Hussain, a researcher at a Karachi-based brokerage firm that advises investors.

"Given Pakistan's challenging economic situation and significant exports to both the European Union [EU] and the United Staes, aligning with Western-led alliances could prove advantageous for Islamabad," he said.

Hussain said the dynamics of the bloc's politics present Pakistan with an opportunity to facilitate increased co-operation with the United States across trade, security and technology domains.

In fiscal year 2022-23, Pakistan's exports to the EU's 27 nations exceeded $8.1 billion, with key destinations being Germany, the Netherlands, Spain, Italy and Belgium, according to the State Bank of Pakistan.

During the same period, Pakistan's exports to the United States stood at $5.9 billion, while exports to China totalled about $2 billion.

A friend to Pakistan

The United States has proven to be a true ally to Pakistan, despite some dips in the long-lasting relationship.

In June, Pakistan's foreign currency reserves had dwindled to a level that could barely sustain one month's worth of imports, Reuters reported at the time.

With Pakistan about to default, the West -- not China -- rescued it.

The International Monetary Fund (IMF) on June 30 bailed out Pakistan with a $3 billion loan program, offering a desperately needed respite for the South Asian country.

The United States played a key role behind the scenes in helping Pakistan secure the bailout package with the IMF, Dawn newspaper reported July 3, citing diplomatic sources.

"Thanks to Washington, Islamabad has temporarily received crucial relief from the IMF for at least nine months," an Islamabad-based economist who works with the Pakistani Ministry of Finance said on the condition of anonymity.

"But without getting rid of Chinese debts, Pakistan cannot resolve its economic woes," he said.

Pakistan is one of a number of developing countries that are heavily indebted to Chinese lenders. These countries are also facing economic challenges, and they face a growing risk of defaulting on their loans to China.

A February analysis by the Middle East Institute found that about 30% of Pakistan's foreign debt is owed to China, including to state-owned commercial banks.

Observers attribute Pakistan's worsening debt and financial issues to loans and agreements, signed as part of the China-Pakistan Economic Corridor (CPEC), a Pakistani component of Beijing's Belt and Road Initiative (BRI), during the past decade.