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Pakistan PM brings an economic message to the White House

Prime Minister Nawaz Sharif wants to build a post-2014 relationship with the US that is based on economic ties, rather than the Afghanistan war legacy.

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Jonathan Ernst/Reuters
Pakistan's Prime Minister Nawaz Sharif (r.) sits with US House Foreign Affairs Committee Chairman Ed Royce before their meeting on Capitol Hill in Washington, Tuesday, October 22, 2013.

When Pakistan Prime Minister Nawaz Sharif meets with US President Barack Obama today, the future of Afghanistan, trade ties, and the contentious drone program are set to feature on Mr. Sharif鈥檚 agenda.

But driving the conversation, Pakistani government officials say, is a quest to decouple the relationship from its more contentious points over the past decade 鈥 drones, the Osama bin Laden raid 鈥 to focus on economic ties and Pakistan鈥檚 role in Asia after the US pulls out of Afghanistan.

鈥淔undamentally, there is still a window to work with at the moment, to relocate Pakistan in a better strategic equation with the US. There is better appetite for that in [Washington], to look at Pakistan as part of Asia,鈥 says Sherry Rehman, Pakistan鈥檚 former ambassador to the US.

The aim of the visit is to start 鈥渂uilding a post-2014 relationship,鈥 says Sartaj Aziz, the prime minister鈥檚 adviser on national security and foreign affairs. 鈥淲e have to develop an independent relationship and there are a lot of dimensions 鈥 peace in Afghanistan and the overall shared economic relationship, which is very important.鈥

Economic priority

Mr. Sharif plans on pushing an economic agenda in Washington, Mr. Aziz says, following the US decision to restore more than $1.6 billion in military and economic aid to Pakistan that was suspended when relations between the two countries deteriorated after the bin Laden raid.

鈥淭he US already cooperates with Pakistan on energy but we are looking for an expansion of this and private sector investment,鈥 says Aziz. 鈥淲e want better market access. As a matter of policy, Pakistan is not emphasizing aid, other than in education or energy, but trade. The US has been discussing this, but in fact, [bilateral] trade has stagnated at $5.7 to $5.8 billion over the past couple of years. Our plan is to double this in the next five years.鈥

Pakistan鈥檚 economy has struggled over the past decade. Over the past five years, the rate of GDP growth averaged at around 3 percent, with declining foreign reserves and abysmal tax revenue collection. In September, the International Monetary Fund approved a $6.64 billion Extended Fund Facility agreement with Pakistan.

Mr. Sharif and his party, the Pakistan Muslim League-Nawaz, contested this year鈥檚 elections on a platform of economic recovery. The government enacted a reform program in the energy sector and plans on privatizing state-owned companies that are a drain on government finances. It is hoping to attract foreign interest for these companies, as well as for projects planned in the energy sector, such as a power park in Balochistan. The Sharif government also wants better market access for Pakistani companies to export to the US, in particular the the textile sector, which has lost out share to Bangladesh in recent years.

Yet Pakistan continues to struggle to improve its fiscal deficit, and has long been asked to show commitment to expanding the taxpayer base and improving tax collection. The debilitating security situation and energy shortfall pose severe risks to the economy, which deters industries' expansion plans and productivity.

Pakistan鈥檚 influential Dawn newspaper noted in an editorial on Monday that 鈥淓conomic issues are rightly being given importance but Pakistan鈥檚 problems are far deeper than any aid package or monetary assistance for military operations can help resolve. The Sharif government appears unwilling or unable to take the hard steps to structurally turn around the Pakistani economy, so what can an aid or trade partner 鈥 no matter how big 鈥 really achieve?鈥

Afghanistan, drones linger

Despite the shift Pakistan leaders would like to make toward a post-2014 relationship, Afghanistan and drones are still likely to feature heavily in any talks.

Officials said that Sharif is seeking clarity about US plans for Afghanistan鈥檚 future, in particular to assuage concerns that the US will 鈥渁bandon鈥 Pakistan after it withdraws from Afghanistan.

Pakistan 鈥渃annot be saddled with the burden of Afghan reconciliation,鈥 says Ms. Rehman. 鈥淭his burden needs to be articulated and shared,鈥 she said. 鈥淭he path to peace should not only be Islamabad鈥檚 responsibility.鈥

Sharif is also expected to reiterate Pakistan鈥檚 opposition to the controversial drone program, highlighted by yesterday's Amnesty International report on US drone strikes in Pakistan. During a stopover in London before his US trip, that 鈥淭here is no illusion about this policy; we believe drones challenge Pakistan鈥檚 sovereignty. We consider drone strikes as an attack on our independence; these attacks go against Pakistan鈥檚 interests. This should stop.鈥

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