Pakistan’s pivot to geo-economics has gained significant momentum, particularly in the context of its deepening ties with Central Asian Republics and Azerbaijan, aligning with the country's goal of becoming a regional trade hub
In recent years, Pakistan has strategically shifted its foreign policy focus from geo-politics to geo-economics, prioritizing economic cooperation, trade, and energy partnerships, particularly with the Central Asian Republics (CARs). This pivot aligns with Pakistan’s broader vision to emerge as a regional trade and energy hub, taking advantage of its strategic location besides affording the landlocked Central Asian nation’s access to Arabian Sea. In the past two years, there has been a surge in diplomatic engagements, trade agreements, and infrastructure projects that have strengthened Pakistan's ties with CARs and Azerbaijan, underscoring the progress of this shift toward geo-economics.
Geo-economics and Pakistan’s Strategic Vision
Pakistan’s pivot to geo-economics has been a response to the country's pressing need for economic growth, regional stability, and energy security. With its geostrategic location linking South Asia, Central Asia, and West Asia Pakistan has positioned itself as a gateway for trade and energy, especially through initiatives like the China-Pakistan Economic Corridor (CPEC). Central to this strategy is enhancing connectivity with Central Asia and Azerbaijan, a resource-rich region eager to access the global markets.
The CARs—Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan, and Tajikistan—along with Azerbaijan, offer Pakistan the opportunity to strengthen regional integration and open up new economic corridors. This vision is bolstered by the desire of CARs and Azerbaijan to reduce their dependence on traditional northern trade routes and gain direct access to the Arabian Sea through Pakistan’s ports, particularly Gwadar.
In the past years, Pakistan has significantly expanded its diplomatic engagements with CARs and Azerbaijan, setting the foundation for long-term economic and strategic partnerships.
Pakistan-Uzbekistan Relations
Uzbekistan has been at the forefront of Pakistan’s geoeconomic outreach in Central Asia. A notable development was President of Uzbekistan, Shavkat Mirziyoyev visit to Pakistan in July 2024. Premiers of both countries reaffirmed their commitment to multifaceted relations between their countries, vowing to expand cooperation in trade, connectivity, defence, security, culture, and people-to-people contacts.
Pakistan-Uzbekistan Transit Trade Agreement is another linchpin for bilateral relations that allows Uzbekistan to access Pakistan’s ports. At the 8th meeting of the Pakistan-Uzbekistan Inter-governmental Commission on Trade-Economic and Scientific-Technical Cooperation (IGC) in February 2024, Uzbekistan and Pakistan signed a US$1 billion trade deal. The ambassador of Uzbekistan, Oybek Arif Usmanov highlighted a 50 to 60% increase in trade between Uzbekistan and Pakistan over the past four years, with bilateral trade volume rising from US $300 to 400 million in the last year alone. He highlighted the potential for growth and regional connectivity between Central Asia and Pakistan. The Trans-Afghan Corridor is an already signed $4.8 billion railway project of three countries connecting Pakistan, Afghanistan, and Uzbekistan. It features a 573-km rail track that will link Central Asia to the ports of Pakistan.
Pakistan-Kazakhstan Relations
Pakistan's relationship with Kazakhstan has also grown stronger over the past two years. The signing of the Kazakhstan-Pakistan Transit Trade Agreement was a significant milestone, further solidifying Pakistan’s role as a trade facilitator for Central Asian exports. Enhanced bilateral relations between Kazakhstan and Pakistan have reached new horizons through the collaboration of KZT Express, a subsidiary of Kazakhstan Railway and QazTrade Center for Trade Policy Development Company with Pakistan’s National Logistic Corporation (NLC) a new trade route has been launched.
Pakistan-Turkmenistan Relations
Energy cooperation with Turkmenistan continues to be a critical focus for Pakistan. In July 2024, Foreign Minister Ishaq Dar held talks with Turkmenistan’s Minister for Foreign Affairs Rashid Meredov, where they agreed to intensify joint efforts to further expand and deepen bilateral cooperation in defence, economic and political domains. The Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas Pipeline remains to be a priority, with Pakistan and Turkmenistan reaffirming their commitment to expedite its construction. TAPI is expected to provide Pakistan with 33 billion cubic meters of natural gas annually, significantly boosting the country’s energy capacity. Turkmenistan is poised to become the first Central Asian country to utilize Pakistan’s Gwadar Port under the China-Pakistan Economic Corridor (CPEC), reducing trade costs by 30%, as a draft agreement between the Port of Gwadar and the Port of Turkmenbashi is currently under cabinet-level review.
Pakistan-Azerbaijan Relations
Pakistan’s relations with Azerbaijan have grown markedly stronger, particularly in the last two years. Azerbaijan, a key player in the Caspian region, shares common strategic interests with Pakistan, especially in energy and defence cooperation.
During President Ilham Aliyev’s visit to Pakistan in July 2024, both countries deepened their bilateral ties by signing several agreements. These included a Preferential Trade Agreement (PTA) and a Transit Trade Agreement (TTA) to enhance trade. Other key areas of cooperation focused on energy, tourism, and defense. The leaders also agreed to increase bilateral investment, setting a target of $2 billion, and emphasized the strategic importance of their trilateral partnership with Türkiye. During Sharif’s visit to Azerbaijan in June 2023, an agreement was reached that enabled the State Oil Company of the Republic of Azerbaijan (SOCAR) to deliver liquefied natural gas (LNG) to the energy company Pakistan LNG (PLL) at discounted rates for one year, with the LNG sourced from third-party suppliers. Additionally, the two countries plan to establish a joint investment portfolio with an estimated value of US $2 billion to finance joint business projects. Sharif added that the agreements on these projects will be ready to be signed by November during his visit to Baku to attend the 2024 UN Climate Change Conference.
Pakistan-Krygystan Relations
CASA- 1000 Is a $1.16 billion project currently under construction that will allow for the export of surplus hydroelectricity from Kyrgyzstan and Tajikistan to Afghanistan and Pakistan. The project is designed to transmit 1,300 MW of electricity from Kyrgyz Republic and Tajikistan to Afghanistan and Pakistan. Energy cooperation continues to be a key focus for Pakistan’s relations with Central Asia. The foundation stone of the project was jointly laid by Tajik President Emmolai Rahmon, Chief Executive Afghanistan Abdullah Abdullah, Kyrgyz Prime Minister Sooronbay Jeenbekove and Prime Minister Nawaz Sharif in 2016. Ambassador of the Republic of Kyrgyzstan to Pakistan, Ulanbek Totuiaev, has said that CASA-1000 would be completed by the end of 2024.
Conclusion
Pakistan’s pivot to geo-economics has gained significant momentum, particularly in the context of its deepening ties with Central Asian Republics and Azerbaijan. Over the past two years, high-level diplomatic visits, trade agreements, and energy cooperation projects have taken center stage, aligning with Pakistan’s goal of becoming a regional trade hub. From the Trans-Afghan Railway Project to the TAPI pipeline and the CASA-1000 electricity project, Pakistan’s economic future is increasingly intertwined with that of Central Asia and Azerbaijan.
While challenges remain, particularly in ensuring regional stability and securing investment for infrastructure projects, Pakistan’s evolving relations with CARs and Azerbaijan promise to reshape regional dynamics and further solidify its role as a key player in regional economic integration.
(The author is a graduate of international affairs with interests in foreign policy, national security, and geopolitics. She has worked with the National Assembly of Pakistan. Views are personal. She can be reached at manahil.jaffer786@gmail.com )
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