Signs of a Thaw


Foreign Minister Bilawal Bhutto was certainly able to break the ice in his first face-to-face meeting with US Secretary of State Antony Blinken in New York, and there were plenty of references to a joint commitment to working together and improving economic and commercial ties, etc. That’s very good news from Islamabad’s point of view because Washington’s goodwill is crucial for us to engage with major international financial institutions (IFIs) at this time. This should also help in reviving the IMF program because, separately, Finance Minister Miftah Ismail met an IMF team in Doha and assured them that controversial petrol and electricity subsidies will be rolled back; in keeping with the agreement originally made with the Fund.
Bilawal also seems to have been successful in getting the ball rolling towards proper diplomatic interaction with the US, which also went into something of a freeze in the last days of the PTI administration. First there was the fact that President Biden did not call or interact with Pakistan in any way since coming to power. Now there’s PTI’s claim, repeated at nauseam, that the Biden administration planned and bankrolled the no-confidence motion against Imran Khan in April. Everybody knows that the conspiracy theory was only and only for internal consumption to bring PTI’s support base alive again, but to expect such things to have no impact in bilateral relations would not be very wise.
These developments should get the markets to calm down a little. So far both equities and the currency are in a frightening freefall that doesn’t seem to end. Things have gone from very bad to much worse in the five weeks since the new government took over. So if Bilawal has been able to set in motion a series of events that will undo some of the damage that has already been done, he’s already got off to a very impressive start as foreign minister.
It’s too soon to say for sure, of course, but there are very clear signs of a thaw in perhaps the most important diplomatic relationship that Pakistan needs to nurture at the moment.