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Introduction

Pakistan’s foreign and economic policy today hinges on balancing between China and the United States. While China anchors its long-term investments through CPEC, the US offers short-term financial and diplomatic relief. This external dependence has weakened domestic accountability, as decisions are driven by military and elite interests rather than institutional oversight.

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How Dependency upon China Erodes Domestic Accountability

• Opaque Economic Agreements: CPEC deals are negotiated by the executive and military without parliamentary or public transparency.
  Eg: The over $70 billion CPEC investment lacks clear disclosure of debt terms or repayment structures.
• Skewed Economic Priorities: Chinese loans prioritise large infrastructure projects over fiscal reform and industrial revival.
  Eg: Investments in Gwadar and power projects added debt without improving local productivity.
• Erosion of Sovereignty through Debt Dependence: Heavy borrowing from China restricts Pakistan’s financial autonomy.
  Eg: Beijing’s debt terms have influenced Islamabad’s budgetary and repayment choices.
• Reduced Parliamentary Oversight: The Army dominates CPEC’s decision-making, sidelining civilian institutions.
  Eg: Civilian ministries have limited say in project implementation and monitoring.
• Strategic Alignment Over Economic Autonomy: Economic policy often mirrors China’s geopolitical agenda.
  Eg: Pakistan’s support for the Moscow Format declaration aligned with Beijing’s anti-US position.

How Dependency upon the USA Erodes Domestic Accountability

• Transactional Foreign Policy: Aid and investment talks prioritise short-term relief over structural reform.
  Eg: Pakistan’s offer to US investors for Pasni Port aimed at quick capital inflow, not sustainable growth.
• Policy Volatility and External Influence: US and IMF leverage dictates Pakistan’s fiscal policies.
  Eg: IMF conditions, backed by US pressure, influenced tax and subsidy reforms.
• Undermining Institutional Credibility: The military handles key negotiations, weakening democratic oversight.
• Encouragement of Rent-Seeking Governance: Reliance on foreign aid reduces incentive for domestic revenue generation.
  Eg: Successive governments preferred IMF loans over tax reforms to fill fiscal gaps.
• Internal Legitimacy Crisis: Balancing anti-US rhetoric with pro-US engagement confuses policy direction.
  Eg: Endorsing the anti-US Moscow Declaration while courting Washington for aid exposes policy inconsistency.

Conclusion

Pakistan’s twin dependence on China’s structural financing and America’s transactional aid reflects weak governance and elite-driven policymaking. Sustainable economic sovereignty demands transparency, fiscal reform, and institutional checks. Only through internal accountability and diversified partnerships can Pakistan reclaim control over its economic future.

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