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The newly elected government of Pakistan has clearly stated that it will review its domestic and foreign policies. Prime Minister Syed Yousaf Raza Gilani, in an article published in The Washington Post on April 30, 2008 wrote, “Like newly elected governments in other democratic societies, we intend to set the tone and agenda. We want to show the world that our nation is back in business, with an overwhelming mandate from our people.” The new government presents increased economic opportunities and new avenues for many foreign investors. But as the title of the article suggests (“We Will Fight Terrorism – Our Way”), Pakistan will also alter its security agenda. The new government’s key focus, unlike that of General (ret.) Pervez Musharraf, will be on the countries of the Gulf.

During the decades of the 1970s and 1980s, Pakistan had close military and defense relations with most of the Gulf countries. A high point of Pakistani military involvement in the region came during the US led war against Saddam Hussein’s Iraq, when Pakistan sent more than 11 thousand troops to help secure Saudi Arabia. Millions of Pakistani expatriates were hosted by the Gulf and Pakistan’s economy thrived on their remittances. Over the years, there has also been considerable interaction between the ruling elite of Pakistan and countries such as Saudi Arabia and the UAE, who hosted Nawaz Sharif and the late Benazir Bhutto while in exile. However, there has not yet emerged strong evidence of a coherent foreign policy strategy towards these nations. Ever since September 11, Pakistan had all but ignored the Gulf States, relying solely on the Bush administration to meet its security needs. Many in Pakistan believe that this approach was misguided and that General Musharraf devised this policy to compensate for his lack of domestic legitimacy. By the time national elections were held on February 18, Pakistan was in shambles. Indicative of the grave economic crisis, food prices skyrocketed 20 percent in just one year (March 2007 – March 2008).

A New York Times report on November 5, 2007 pointed out that in spite of Musharraf’s failure to curb terrorism, “the United States has continued pumping money to the country,” but the distribution of this aid has been asymmetrical and the exact amount provided is not documented. In a study published in August 2007 by the Center for Strategic and International Studies, the estimated amount given to Musharraf administration is “at least $10 billion, since September 11, excluding covert funds.” Giving details, the study states that 60 percent of the funds were provided to the military while 15 percent were for the purchase of weapons systems. The Pakistani government received another 15 percent for budget support. The New York Times writes that a meager amount of 10 percent was reserved for much needed development or humanitarian aid.

In the present world order and the demands that it presents, security concerns for Pakistan do not necessarily mean extended ties in military terms. Indeed, there is a paradigm shift underway in Pakistan marked by a growing recognition that the country’s security lies in promoting the economic wellbeing of the people through poverty and unemployment reduction. Accordingly, Pakistan has to transform itself from a garrison state to a welfare society. The GCC states can contribute to this transformation, and there are encouraging signs that they have begun to do so.

According to the latest data from the State Bank of Pakistan, expatriates remitted $2.68 billion to Pakistan in the fiscal year July 2006 to June 2007. This is a 28 percent increase from the $2.06 billion in the previous fiscal year, with Saudi Arabia as the GCC country from which the largest proportion of remittances was sent. Members of the GCC have demonstrated their increasing eagerness to invest in major sectors such as energy, steel, real estate and telecommunications, although some critics argue there has to be more investment in the industrial, manufacturing, and agricultural sectors.

A report by the World Bank painted a dismal picture for Pakistan’s food shortage. It included Pakistan among a list of 35 nations that could face deadly riots. It further said that Pakistan lacked a widespread social assistance program targeting the poorest of the poor and that it needed immediate foreign assistance. In recent weeks, UAE companies like Al Ghurair Group, Emirates Investment Group, Effco from Sharjah and Majid Al Futtaim (MAF) Group showed interest in investing in Pakistan’s agriculture. Moreover, the Middle East – Pakistan Agriculture and Dairy Investment Forum pledged over $3 billion in new investments to Pakistan’s agricultural and dairy sectors. Efforts are also being made to increase current $31.1 billion investment from the UAE and trade of $5 billion to a much higher level. Pakistan needs help and Gulf investors are responding to the call.

In the ever-changing geopolitical landscape, Gulf States are concerned about Pakistan’s economic security and see Pakistan’s stability and its potential to confront extremist tendencies to be dependent in large part on its economic viability. Recognizing the importance of economic cooperation, both sides are seeking mutual incentives and prompt each other to develop in a direction that promotes peace and security at the bilateral, regional and global levels.