Syed Shabbar Zaidi

There are around 1 million people in the Pakistani diaspora living in the United States of America (USA). From 3 to 5 May 1950, Pakistan’s first Prime Minister, Liaquat Ali Khan, visited Washington. It was a clear demonstration of Pakistan’s loyalty to the anti-Soviet bloc. The US responded well and provided economic aid to the tune of US USD 20 billion from 1953 to 1970. This was a very big sum in those periods.

Republicans such as Eisenhower, Johnson, and Nixon remained US President during that period except for a slightly less than three years’ term for Kennedy being a Democrat. Pakistan was the second or third-largest recipient of financial support from the US. Republicans were close to Pakistan on account of their internal semantics in the US. The Colombo Plan of 1950 was for Commonwealth countries; however, the USA supported it. The Plan was the first international help to Pakistan.

Pakistan’s industrial base is the product of that support from the US. The institutions like Pakistan Industrial Credit & Investment Corporation (PICIC), Institute of Business Administration (IBA) in Karachi and Pakistan Institute of Development Economics (PIDE) are the products of US collaboration. Pakistan remained the major partner of the US in its Cold War in the pre-1970 period. Pakistan’s stable foreign policy led the USA to establish the Regional Cooperation for Development (RCD) involving Iran and Turkey. Pakistan became an ideal country in Asia as a model for economic development. Per capita income of Pakistan reached US USD 175 in 1970 from 85 USD in 1947.

Up to that period economic relations with the US were moving in the right direction. However, domestic political and economic power was wholly concentrated in the western wing. There was no industrial group from the Eastern wing and even the industries in that area were owned by persons belonging to the Western wing. Resultantly, there was a sense of economic deprivation. India in collaboration with Soviets took advantage of the same and Bangladesh came into existence. The US, due to international compulsions, tacitly succumbed. Perceived good relations of General Yahya with Nixon and Kissinger could not save Pakistan.

Zulfiqar Ali Bhutto, though popular in Pakistan, was not able to carry the US. Accordingly, the economic aid from the US reduced substantially. Pakistan developed political and military relations with China at the cost of displeasing the US.

In 1979, the then Soviet Union came to Afghanistan. Then everything changed. From that time to the fall of Kabul in 2021 the commitment and interest of the US were different. The US paid money; however, the use and purpose was different. Furthermore, in 1979 Iran also became anti-US. This is a long period of forty years. These are the forty (40) lost years of Pakistan. During this period Pakistan became a market of cheap Chinese goods which were imported under a heavy under-invoicing system. The country’s workers’ remittance increased from USD 14 billion to USD 30 billion in 2024. These remittances exceeded the tangible exports in real sense. This all resulted in a consumer oriented society without any tangible base for exports. Pakistan had a perennial shortage of foreign exchange as there was neither any foreign aid nor investment. There were IMF programmes before 1970 also; however, the borrowing was very nominal. Out of SDR drawn, about 95 percent were after 2008.

Since US and Western investment had dried up, Pakistan, therefore, as a last resort, looked towards China to meet foreign exchange requirements for industrial development. Pakistan became part of China Pakistan Economic Corridor (CPEC) in 2015. The author always had reservations on the validity of economic assumptions of CPEC. However, Pakistan continued with that by the end of 2024 the investment by Chinese companies, especially in power projects and infrastructure to the tune of around USD 40 billion. This was all loan payable over the time. Later on, it transpired that terms of repayment and pricing of products were not suitable for the country. Under that unplanned system there was an investment in generation to the level of around 40,000 MW whereas the sustainable demand was never more than 30,000. Furthermore, the trade from Gwadar could not materialise, and infrastructure development also remained fruitless. As a result, by the end of 2008 and after then Pakistan has drawn 10 billion million SDR from the IMF, out of which 5 billion SDRs are still outstanding. One SDR is equal to around 1.4 USD. The IMF protected Pakistan from default.

Now the time has come to review the economic paradigm and priorities of Pakistan. Pakistan needs immediate investment in exploration of oil and gas. This is technology as well as funds. It is a fact that the same can only be provided by the US and the rest of West. Not China. At present all the major oil drilling companies of the world include SLB, Halliburton, Baker Hughes, Transocean, and Noble Corporation, while integrated majors like ExxonMobil and Chevron are also major players in the sector. All these are or in the West.

Pakistan has significant oil and gas potential due to its large, underexplored sedimentary basins, particularly the offshore Indus Basin, which is considered one of the world’s largest submarine fan systems. While recent discoveries offer the chance to reduce dependence on imports, challenges remain, including security concerns in exploration areas and the need to balance development with environmental and climate goals. Pakistan has a large sedimentary basin covering over 880,000 sq. km, with significant portions remaining unexplored both onshore and offshore. There is information in the international press that there is some major discovery in offshore concession. However, the same is to be confirmed. Pakistan has reportedly discovered the world’s fourth-largest oil and gas reserves in its offshore territory, a development that could transform the country’s energy sector and economic future. According to news reports, top security officials have revealed that a geological survey conducted over three years in collaboration with a friendly country has successfully identified the location and estimated size of the reserves under Pakistan’s sea, which stretches over 3,000 kilometres.

The US and the West have a very positive history in oil and gas exploration. Pak-Stanvac, a joint venture of Esso Eastern Inc US formed in 1954, discovered gas at the Mari Field in Pakistan in 1957, which led to the production of natural gas beginning in 1967 and was later instrumental in the creation of Mari Petroleum Company Limited. The Sui Gas field, Pakistan’s largest natural gas field, was discovered in 1952 in Balochistan. Commercial drilling and exploration began in 1955. It was a project of the UK-based Burmah Oil Company Limited.

In this context the message of US President Donald Trump makes a lot of sense. US companies are fully aware that there is huge potential in Pakistan. What they require is stable economic cooperation between two countries, which is not disturbed by unconventional steps. Donald Trump is a ‘practical businessman’ who would evaluate the new economic relationship with Pakistan wholly on a commercial basis as now such a relationship is not based on any mission to fight the Cold War or Al-Qaida. It is a simple economic equation where Trump rightly feels that the Chinese are not the competitors and goodwill with Pakistan people may create an atmosphere, which is essential for the US in this region. Now it is the duty of Pakistanis not to miss that opportunity.